Deferring mortgage payments due to COVID-19

Discussion in 'Investment Strategy' started by albanga, 27th Mar, 2020.

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  1. The Y-man

    The Y-man Moderator Staff Member

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    Very interesting!! Cynic in me says "Good PR, looks like we care for customers at the same time make more money" ~~ kind of like encouraging people NOT to pay off the credit cards due to tough times!

    The Y-man
     
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  2. Bris developer

    Bris developer Well-Known Member

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    i just think the "capitalised interest" is a shocking money grab
    but even at the 3 or 6 month mark, i think the "accumulated interest" should be waived - if businesses can freeze their rent, normal people can freeze their bills and rent... why cant landlords freeze their interest... the banks are losing very little here.. and the govt can pay the banks cost of funding for the duration of the freeze period...
     
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  3. TMNT

    TMNT Well-Known Member

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    Sooooooooo
    A tenant cant get evicted if they stop paying tomorrow, even if they haven't lost their job, their tenant record is unaffected, and they don't have to pay arrears

    A landlord can apply for a mortgage "holiday", but still has to pay the shortage, pay extra interest, probably will get a default

    Lucky I'm a greedy rich landlord
     
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  4. Omnidragon

    Omnidragon Well-Known Member

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    Hello turtles
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Dunno if many lenders are yet offering this for IP loans

    ta
    rolf
     
  6. SharonC

    SharonC Active Member

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    so is it only for ppor loans at this stage? and when is josh frydenberg going to make an announcement on tenants and landlords?
    thanks
     
  7. Pier1

    Pier1 Well-Known Member

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    Why?
     
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  8. NickWCBA

    NickWCBA Well-Known Member

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    Can someone clarify or confirm my thinking....

    If you have two loans, own occupied (P&I) and investment (IO), and considering that the investment interest rate is higher, are you better off taking the capitalised loan holiday on the investment but diverting those repayments into your owner occupied offset?

    @Terry_w would love your thoughts!
     
  9. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Already covered this a few days ago:
    Tax Tip 280: Loan Repayment Holidays and Tax Deductibility Tax Tip 280: Loan Repayment Holidays and Tax Deductibility
     
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  10. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    No it applies to investment loans too.
    Tenancy law is state based legislation, Commonwealth doesn't have jurisdiction,
     
  11. HUGH72

    HUGH72 Well-Known Member

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    It’s shocking policy and the definition of policy on the run. There is enough of a social safety net being developed that most tenants will be able to make payments...hopefully.
     
  12. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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  13. Niche

    Niche Well-Known Member

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    I would question the fact that banks are losing very little, surely that interest from loans is majority of their income so by waiving 6 months of interest they are losing 6 months of income for over 6 months and not only that but they are still paying interest on term deposit and savings accounts
     
  14. The Y-man

    The Y-man Moderator Staff Member

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    They won't "lose" in the long term, but cash flow (and therefore dividends) will certainly be affected.

    The Y-man
     
  15. paulF

    paulF Well-Known Member

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    "CoronaRorts: rescue measures a free kick or fee kick for the banks?"

    CoronaRorts: rescue measures a free kick or fee kick for the banks? - Michael West
     
  16. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I don't think any lender has passed on the latest rate cut and they are supposed to be using the savings they make to help borrowers - but....
     
  17. Niche

    Niche Well-Known Member

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  18. Omnidragon

    Omnidragon Well-Known Member

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    US is ok I think. Not that different to old QE. That’s why I like US Admin.

    Subsidising people not working is the most ludicrous thing I’ve ever imagine coming from a pro-free market party (ie the Liberals and the Tories). Soon no one will want to do real work, because it’s easier to work at an empty retailer and get $800/week.

    After the virus there’ll be a flood of super cheap money that will push asset prices up (good for us) that will distort the economy again in favour of rent seekers.
     
    Last edited by a moderator: 30th Mar, 2020
  19. wilso8948

    wilso8948 Well-Known Member

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    Is there any affect on future borrowing? I know they have stated it will not hit your credit file. But what is to stop CBA for eg asking next time you go for a loan "you couldn't even pay your last one?" Will it be assessed in future applications? Or is that still an unknown?
     
  20. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It shouldn't be as it is not a default or a credit blemish
     
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