All Topics / Help Needed! / Interest Only loan for PPOR

Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of chanakyachanakya
    Participant
    @chanakya
    Join Date: 2012
    Post Count: 26
    October 25, 2012 - 9:12 am

    I really don't get the concept of having Interest Only loan for PPOR. Isn't it better to pay it off faster?

    Does any financial institution offer Interest only loan for 30 years? is the interest on the IO loans higher compared to loan with principle + interest?

    It is sometimes hard to evaluate your mortgage broker? are there any tips …

    Thanks.

    cha

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    October 25, 2012 - 9:52 am

    Should be pretty easy to work out whether your broker is decent or not – the spectrum varies dramatically in the industry when it comes to quality. 

    Interest only for a PPOR works particularly well if the PPOR is going to become an IP in the future….or if cashflow is tight.

    This blog entry explains the concept.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of chanakyachanakya
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    @chanakya
    Join Date: 2012
    Post Count: 26
    October 25, 2012 - 10:18 am

    Hi Jamie,

    Thanks

    Profile photo of N@thanN@than
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    @n-than
    Join Date: 2010
    Post Count: 241
    October 25, 2012 - 10:50 am

    Hi Cha,

    If you had interest only on your PPOR with an offset account than you would be able to avoid the situation you have found yourself in now (as discussed on another post), and you would be able to claim the full amount on your current PPOR when you move out and turn it into an IP, because you are not re-borrowing any money just shifting it from one bank account to another.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    October 25, 2012 - 10:54 am
    N@than wrote:
    Hi Cha,

    If you had interest only on your PPOR with an offset account than you would be able to avoid the situation you have found yourself in now (as discussed on another post), and you would be able to claim the full amount on your current PPOR when you move out and turn it into an IP, because you are not re-borrowing any money just shifting it from one bank account to another.

    100%

    You'll be telling me how to structure your loans soon!

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of N@thanN@than
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    @n-than
    Join Date: 2010
    Post Count: 241
    October 25, 2012 - 11:22 am

    Haha don't think I will ever get to that stage! I'm happy to leave that bit to the experts!!

    Profile photo of PLCPLC
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    @plc
    Join Date: 2012
    Post Count: 400
    October 25, 2012 - 2:25 pm

    Hi Cha, others above have answered your first question.

    In regards to your other questions, lenders generally offer interest only loans either up to 5 or 10 years, but in most cases they can be rolled over into a new term again when the initial period ends.

    Also interest only rates are the same as P&I ones.

    Cheers

    Tom

    PLC | Phoenix Loan Consulting
    Email Me | Phone Me

    Melbourne based Mortgage Broker | Making Finance Simple

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