Noobie question? IO Loan
- Thread starter wally
- Start date
Wally, they do vary. Mine are for 5 years. Nothing stopping you re-financing again after 5 years into another IO loan.
Many lenders will allow interest only for up to 10 years, but 5 tends to be the norm.
You can also get a Line of Credit loan which is indefinitely interest only (between 15 and 30 years). The problem with these is that the lenders tend to charge a premium interest rate for these loans. You usually don't get features like offset accounts with them, which are very useful for investors. It's also far easier to move a regular loan to another lender than a Line of Credit.
I tend to agree with buzzlightyear regarding structuring. Go with a variable loan, interest only for 5 years. Review the loan after 5 years. The options might be to roll over into another 5 year interest only, refinance completely to another lender or to just let it go to principal & interest.
You can also get a Line of Credit loan which is indefinitely interest only (between 15 and 30 years). The problem with these is that the lenders tend to charge a premium interest rate for these loans. You usually don't get features like offset accounts with them, which are very useful for investors. It's also far easier to move a regular loan to another lender than a Line of Credit.
I tend to agree with buzzlightyear regarding structuring. Go with a variable loan, interest only for 5 years. Review the loan after 5 years. The options might be to roll over into another 5 year interest only, refinance completely to another lender or to just let it go to principal & interest.
