IO loans

Discussion in 'Property Finance' started by ric.r, 6th Feb, 2019.

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  1. ric.r

    ric.r Member

    Joined:
    27th Feb, 2018
    Posts:
    16
    Location:
    Sydney
    Hi,
    My wife and I have all of our investment loans (6 loans) at principal and interest and I’m thinking of trying to convert them all to interest only. I believe this will give us a bit of a boost with cash flow I’m just wondering if we do that with these new lending rules, would it have a negative impact on future borrowings or does it still depend on other factors?
    Thanks
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    4,632
    Location:
    Gold Coast
    Conversion to IO with most lenders needs full app x 6

    if u service and values ok, it will work

    5 years IO means any new loans with APRA lenders, means existing loans assessed at 25 years, so will reduce borrow cap by a bit

    Non apra lenders, typically IO is better for future borrow cap

    ta

    rolf
     
    Lindsay_W and ric.r like this.
  3. ric.r

    ric.r Member

    Joined:
    27th Feb, 2018
    Posts:
    16
    Location:
    Sydney
    Thanks