CBA IO loans

Hi can anyone tell me if they have/had loans with CBA where the IO period exceeded 10 years. I was under the impression they could offer up to 3 periods of 5 years at IO

 

I currently have I/O loans CBA that have exceeded the 10 yr mark and have just converted over to P/I

For me to switch back to I/O my banker says I have rewrite the loan to a new 30 loan and restart the 10 yr I/O period again

He says he is happy to do this for me

However I think I will refinace that loan somewhere else instead at a much better rate

 

Have they converted with 20 yrs left to pay it off?

 

So you have to go through a full refinance with CBA if you stay with them, ie produce docs, property valuation etc

 

Not yet, but I’m certain they told me 5 years ago the maximum IO was 3 by 5 years and now being told differently. Funny thing is we are in our 11th year at IO

 

Painful - Yes

 

I have not done it yet - but I assume yes - though they have most of this stuff already

 

Even if you could extend another 5 years IO you probably shouldn't as the repayments will be very high on PI over 20 years, and even higher on 15 years when the IO period ends. If you cannot qualify for finance at this point it could ruin your retirement plans
so refinance back to 30 years to make minimum repayments lower might be a good idea.

 

I intend to sell but not yet due to negative growth. Just wanted to hold on a bit longer so we could sell to pay out loan plus cost of selling

 

I’m sorry to hear that you are in that situation

 

Lender product & policy changes all the time, and lots have happened since 2015 and IO period is definitely one of them.

Right now the max for CBA investment IO period is 10 years max - and you can't get that upfront. You have to apply for 5 years first, and then at end of first 5 years request to extend for another 5 years (subject to lender assessment).

Cheers,
David

 

Hi David

Thanks for the reply. Can you confirm if CBA used to offer 3by5 years at IO. I have put a complaint into AFCA as we’re now forced to sell at a loss. 5 years ago we could have sold and the loan would have been paid out

 

What prevented you from selling 5 years ago?

 

looking forward to capital growth and getting some of our monies back on what we put in

 

Whats the connection between having a loan with CBA and not being able to sell?

 

Property value hadn’t changed after owning it for 5 years and when speaking to CBA to extend IO period I asked what maximum period of IO I was advised up to 15 years at 5 year intervals . We felt we would have more time for capital growth ie another 10 years. Property has now gone down in value by about $60k.

 

I don't see how you would have any basis to make a complaint against CBA for this. But you never know.

 

CBA isn’t responsible for your property going down in value.

 

At the time you applied they probably had maximum 15 year IO (yes they did offer this in the past) but they since changed their policy, whcih they're allowed to do. You also used to be able to apply for 10 years IO straight off the bat but you still needed to pass serviceability.
Have you looked at refinancing to another lender to reset the loan term and get a new IO period? Probably best you speak to a broker