Interest Only Loans

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Don’t have much time but feel I have to respond.

1. Most IO periods are for 5 years. ANZ offers 10 years and St George offers 15. An indefinite IO period = LOC.

2. LOC are often a waste of money – too expensive. Normally only 1 out of 10 people that think they need a LOC actually do. You are better off (from a cost perspective) to use an offset or basic loan.

3. St George’s LOC is ok but too expensive.
– High ongoing fees ($10 per month, per sub-account)
– Break fees of $1,000 for 3 years.

ANZ’s LOC is much, much better (higher interest rate discounts, less fees, no break costs).

I’m writting an article for The Australian about LOC’s and will let you know when its published.

Cheers

Stu

Property & Finance News
at http://www.prosolution.com.au

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LOC is working for me to pay off my PPOR as i am self employed and have my tax sitting in the account for the month as well.

Dear davo70

Do you know if with any of LOC, can you have one sub-account in a company/business name.

I want to have one sub-account in joint name for “private expenses” where we would deposit my husband’s salary, one for property investment (joint name as well) and a third one for our home businesses (we have two small businesses) income/expenses.
It happens that our home businesses are under company/business names so the third subaccount would have to be in company/business names.

Any comments
Barbara