So what do you advise your clients to do once their IO loan reverts to P&I after the 5 years or so are up? I understand there's a good chance the IO loan can be extended, but what if the bank decides they are no longer eligible? It'll revert to P&I…so surely it makes sense to understand the potential risk that might be involved with that…[Read more]

Thanks for replying.I understand the cash flow benefits of IO over P&I.I do think I will be able to find a loan with an offset account that reduces monthly repayments, which is great.The reason I'm concerned is that frankly I'm not sure about my employment status, so having the ability to keep repayments low is very attractive. I do have…[Read more]

As often the case my very next search after posting this yielded some answers…It seems that certain offset accounts allow monthly repayments to be reduced while others reduce the principal and the loan term and eligibility may depend on whether the property is PPOR or investment.Wish the lenders would be clearer about this.Sorry for the waste of space

Thanks both – I really appreciate your thoughts and suggestions. It seems we're roughly on the right path, we just need to figure out what we believe is a fair price and of course actually find a PPOR we're happy to eventually own.

ummester wrote:
I don't think anyone can judge the bottom perfectly. I will buy when I feel like I am getting a good…[Read more]

…and then at the end of the year what strategy would you suggest? Presumably assuming the market has slowed or fallen 5-10%?