ANZ increasing IO for investment to 90% and 10yrs IO

We'll see more of this

 

Sure..but pretty devastating to borrowing capacity . Any other debt you want to take on is going to treat a 10 year IO ANZ loan at 20 years P&I . Great for those with oodles of borrowing capacity though, who don't mind sacrificing some of it to get 10 years IO

 

Will be ok for the average investor with the one IO property of which there are many

 

No doubt the other banks are/will be seriously looking at how they can also compete in attracting investors back...

 

The 90% IO option is great. Positive move.

ANZ have been on the front foot with lending of late (at least my credit experience with them is now back to common sense).

10 year IO is a long time. Most loans don't last that long anyway, but the certainty is nice.

 

I hope not .

We haven’t seen the “end of the world” yet that some on PC and in the media are predicting!!!

 

PPOR loans may roll every 3,4 years or so.... but I think any investor sitting on 10 years IO rather than 5 would be loathe to refinance or let it go under current conditions .... just look at the last couple of years for countless examples of forum members who would give their right arm for an additional 5 years IO

The conundrum is...this "looks " like good news...but its really not - for most borrowers anyway. People who flock to this may not understand the consequences. The sugar rush will be satisfying for a while, but they really need to understand that it really hurts borrowing power having 10 years IO on your liabilities... so while hip pockets are better off with IO, borrowing capacity is better off with 5 years IO , or better yet - P&I over 30 years.

So yeah, the 10 year option will be appealing to some - especially those with super strong servicing and those who don't wish to borrow more.... but really a bad idea if you have run of the mill servicing and ambitions to take on more debt to grow a portfolio.

 

If you have the serviceability for a 10 yr IO loan, you'd have pretty strong cashflow numbers behind you. I'd just refinance in Yr 9 or after.

 

Thats not necessarily the case. Potentially, almost anyone can get one 10 year IO loan... even those with modest means may find they can get one .... The first INV loan isnt where the challenge lies. It's the next one. And the next one. And the next one. Each time, that ANZ debt debt is going to be assessed at over 7% , and at P&I, and over 20 years.... That hits VERY HARD on a servicing calc. ( aside from Pepper and Liberty I guess)

 

Next one and next one and next one .... fair enough, but you are talking about a very small % of the population that will own 4 or 5 inv properties, but you seem to find negatives in most things

 

You trying to tell me 10 years IO doesn’t hurt capacity? Please

 

Tell me where I said that? Nice way to deflect negative Nelly

 

This could be a great product for someone about to pull the pin and stop employment for example.

 

You're too funny.... whats the MC stand for? Master in Comedy?

 

Never thought of that. Great idea. If only I met serviceability

 

Assessed at 8.25% which is interesting (seems very high)... honestly I worry this suggests ANZ isn't doing well. They just got downgraded by Morgan Stanley.

 

At least now the ANZ has a real point of difference. Not one I'd recommend in most circumstances, but it is something different.

 

When you add the pricing discretion it drops to 7.25%

 

100% agree he seems to always gild the lily to favor his convo...what he say is absolute trollop..scaremongering at best...

There are lenders willing to lend...most brokers seem not want to use them or build partnerships with them. Non-confirming loans and loans outside some of the crooks in the majors is booming. You have to just find the right broker...

I for one ...have found one who is a gem...to date.....