Hi all,
just a quick one..
will my bank (commonwealth bank) let me change my home loan from principle & interest to interest only without too much hassle ?
im assuming i can, but what charges etc should i expect ?
soon i will be moving into my new home when it is built..live there for 6 months for FHOG…then hopefully rent it out…rent somewhere myself and build/sell again with a family member to hopefully start paying off some of my home loan. i simply want to free up some cash to do other investments..hence wanting to change to interest only.
comments appreciated… if anyone has any advice/comments regarding my “plan” as detailed above… please share!!!
cheers
Lyndon
Hello Lyndon
Unless you have a fixed loan then I don’t think it should be a problem to change to IO. You will be up for the switching fee I think.
I had a quick look on the CB site to see if I could find out for you what their switching fee was but couldn’t find it. They are not really advertising their fees so to see …. or maybe I just looked badly.
Anyway I checked the ANZ site and their switching fee is $350 so I assume the Commonwealth will be somewhere in that area too.
To find out if it’s a good idea to rent out your PPOR and go into rental accommodation, you need to sit down and crunch the numbers.
How much rent will you need to pay for the place you want to rent.
What will you get as rental for your PPOR and then work out all the stuff that will become deductable e.g. interest, depreciation (if it’s a fairly new place this could be quite a nice deduction) insurance, council rates etc. etc.
I assume that your house will be quite negetively geared leading to tax saving.Cruching the numbers will show you pretty quickly if you will win or lose.
No expert, just trying to help. [smiling]
Elka
Hi Lyndon,
What product are you currently in? As Elka said, you should be able to switch to interest only quite easily. The CBA switching fee is $300.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044i switched but i was not with commonwealth bank (rip offs) and it cost me nil…….but i switched the other way…i would never advice some one to do interest only…it aint a good thing unless you lose ya job or something terrible happens otherwise you get no where with ya debt..in steves book he suggest never to pay interest only from memory
Hello All
many thanks for all your responses!
I will check with my broker when i get hold of him and go over my options.
I want to go interest only so i can build investment properties which i will most likely not be holding on to. I then hope the be able to plonk my profits onto my loan…so i guess i am paying off the principle in a way… just not week to week but in lump sums instead.
Thanks all!
Lyndon
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