What happens after IO period ?
- Thread starter Bez
- Start date
Hiya Bez
Couple of things there
1. In theory the bank lends and assesses on PI.................but we all know many of us spend to our capacity.
2. Refinance to another IO term before the first one is out. Generally but not always in an "average" market there will have been some growth in the properties that you can then access as well.
3. Chase a longer term IO period from the start. This can have pros and cons too though.
ta
rolf
Couple of things there
1. In theory the bank lends and assesses on PI.................but we all know many of us spend to our capacity.
2. Refinance to another IO term before the first one is out. Generally but not always in an "average" market there will have been some growth in the properties that you can then access as well.
3. Chase a longer term IO period from the start. This can have pros and cons too though.
ta
rolf
Hiya Ben
Depending on the loan and structure used some I can think of immediately are
1. higher LMI premium
2. lower LVR
3. Slightly higger rates if looking at some LOCs
4. Some LOCs have "repayable on demand" clauses
5. Slightly limited range of lenders,though many are getting with the min 10 and some as much as 15 years IO
ta
Rolf
Depending on the loan and structure used some I can think of immediately are
1. higher LMI premium
2. lower LVR
3. Slightly higger rates if looking at some LOCs
4. Some LOCs have "repayable on demand" clauses
5. Slightly limited range of lenders,though many are getting with the min 10 and some as much as 15 years IO
ta
Rolf
The difference from IO to P&I should be about 2% of the loan balance for a standard 25 year loan, right? Put it this way, if you can't manage the payments once it goes back to P&I, you probably won't be able to manage a few interest rate rises either. That should tell you you're already overleveraged.
Alex
Alex
get another 5 years
gday mate,
when one of my IO loans ran out, I went back to the bank and got another 5 years IO. I cant remember if it cost me or not.. This was going back about 3 years ago.. It may have been $500.. It was a simple ph call and done... I was with St George then. Not a big fan of St George yet they were handy in this situation.
gday mate,
when one of my IO loans ran out, I went back to the bank and got another 5 years IO. I cant remember if it cost me or not.. This was going back about 3 years ago.. It may have been $500.. It was a simple ph call and done... I was with St George then. Not a big fan of St George yet they were handy in this situation.
