Gidday! Harv and welcome to Australia when you eventually arrive!

To answer your questions:

1. Yes you are correct, that Interest Only is based on a ‘Simple Interest’ calculation. 5 years Interest Only is common among most lenders however, there are other lenders such as ANZ that provide for a 10 year Interest Only term. You should be aware that an Interest Only loan will cost you significantly more, 10’s of 1,000’s of dollars more over the full 30 year loan term than commencing repayment of the principle from day 1.

You don’t have to refinance to another lender mortgage brokers might prefer you to, putting aside the fact that this will cost you a range of $500-$1,000 of your hard earned money, they will benefit from many thousands of dollars more commissions.

Generally you can apply for a new Interest Only term with the same lender at little, or in most cases, no cost to you!

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2. This depends upon where and when you purchase an off the plan property. If the property is due to be completed and settle (paid for) in a market experiencing an oversupply and or distressed property sales, such as is being experienced currently in the Melbourne CBD, yes it is not uncommon.

Conversely in a healthy property market with strong demand the valuation will usually be returned at the purchase price and on some occasions higher.

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Hi Dean,

I think what Richard is the current Special that Suncorp is offering at 4.74%pa and $375 annual fee waived which expires next week 20 February 2015 pre RBA 0.25% rate cut i.e. 4.74% – 0.25% = 4.49%.

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