IP to PPOR- refinance needed?

Discussion in 'Loans & Mortgage Brokers' started by Paul Luck, 24th Dec, 2017.

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  1. Paul Luck

    Paul Luck Active Member

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    Have an IP with IO IP loan which I will be moving back into shortly and will become my PPOR. When this happens is it possible the lender can easily switch the loan to a P&I PPOR loan or would this entail the whole refinancing process to occur? Should add the current loan still has 1 year left at fixed so guessing I will need to wait for this to end as well to avoid break fees.

    Do I actually need to advise the bank of this change immediately?
     
    Paul Luck, 24th Dec, 2017
    #1
  2. Terry_w

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

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    Just notify the bank you are moving in. No need to refinance or break the fixed rate. Once the fixed rate expires you could then request a change of product to PI owner occ
     
    Terry_w, 24th Dec, 2017
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  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    some lenders may not allow an IO PPOR transfer - for eg wbc.

    Id look hard at the actual break cost while still IP, since it may be worked as a borrow cost, or maybe deductible on the year incurred - pls seek tax advice

    Even if its not worth doing that, you may find the PPOR variablerate at IO

    While doing all that, perhaps also have a look at using an active/managed debt recycle programme to pay off the debt more quickly


    ta
    rolf
     
    Rolf Latham, 24th Dec, 2017
    #3
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  4. Paul Luck

    Paul Luck Active Member

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    thanks, the lender is wbc. I'd most likely want to switch to P&I. So no need to be re assessed/re financed to switch, just a case of a phone call/form?
     
    Paul Luck, 24th Dec, 2017
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  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    PI flick isnt usually credit assessed.

    not sue you can move from FIXED io to FIXED PI without breaking the loan

    ta
    rolf
     
    Rolf Latham, 24th Dec, 2017
    #5
  6. Paul Luck

    Paul Luck Active Member

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    will wait until the fixed io period has ended and will likely change to variable pi
     
    Paul Luck, 24th Dec, 2017
    #6