Near Death of the IO to PI spread

Discussion in 'Loans & Mortgage Brokers' started by Rolf Latham, 11th Apr, 2019.

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  1. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Suncorps latest fixed rate release

    Zero spread between IO inv and PI inv

    About time, and we have been seeing the gap closing with many lenders

    upload_2019-4-11_12-41-35.png


    Pretty spesh rate too, but remember this is Suncorp, one of the most interesting lenders to get approval from for anything even marginally grey - just my experience though.

    We will see more of this, has been obvious for 12 mths now

    ta

    rolf
    ta
    rolf
     
    Rolf Latham, 11th Apr, 2019
    #1
    EN710, Kassy, JohnPropChat and 8 others like this.
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I wonder which margin was increased ?? I wouldnt imagine the other was cut.
     
    Paul@PAS, 11th Apr, 2019
    #2
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    I saw that this morning, it is interesting. A lot of lenders are still heavily discouraging IO for owner occupier loans, but they're again hungry for investment (Suncorp won't do IO on an owner occ property btw).

    On reading this I was thinking it might be time to start putting business with Suncorp again. They I remembered just how conservative they are on policy and how terrible their service becomes when they have a deal like this. It's an amazing offer, but actually getting it will be incredibly time consuming and painful.
     
    Peter_Tersteeg, 11th Apr, 2019
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Its this bait and switch thing that kills my trust with suncrop.

    Advertise that they do it, have a good rate on the product, get the app in, then ohh sorry u only have 10 days to settle sir, but we can only do PI ...................take it or dont settle in time.

    Its not a good way to build long term business


    ta

    rolf
     
    Rolf Latham, 11th Apr, 2019
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  5. Blurbman

    Blurbman Member

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    I had understood that Westpac was offering the best at 3 year fixed at 3.99%, and $2,000 rebate, but 3.69% is very competitive
     
    Blurbman, 11th Apr, 2019
    #5
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    a day is a long time in mortgages and politics :)

    ta
    rolf
     
    Rolf Latham, 11th Apr, 2019
    #6
  7. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Their volumes must be way down. I haven't considered them for a long time. Any lender that wants 3 months statements on everything to verify living expenses is off my list.

    It will be a debacle dealing with them
     
    Marty McDonald, 11th Apr, 2019
    #7
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  8. God_of_money

    God_of_money Well-Known Member

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    @Rolf Latham planning to buy block of 4 units. Do you think I am able to finance it with 80%LVR?
     
    God_of_money, 11th Apr, 2019
    #8
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    subject to the usual provisions of location, valuation, serviceability etc

    yes

    we have done more than one :)

    ta
    rolf
     
    Rolf Latham, 12th Apr, 2019
    #9
  10. Bendigus

    Bendigus Well-Known Member

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    Qudos Bank are similar aswell. There isn't any difference between these three P&I and IO for Investor loans. In fact, all the fixed investor rates seem to just match their PPOR IO rates

    Fixed Rate Home Loan - Qudos Bank


    3 Year Investor P&I 4.19%
    3 Year Investor IO 4.19%
     
    Bendigus, 25th Apr, 2019
    #10
  11. Wanttoretire

    Wanttoretire Well-Known Member

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    We still have an IO variable loan for IPs with CBA.
    Expires in July 2021. Will have no serviceability then, so automatic P&I...cannot move banks.

    My question. Should we change to fixed IO for next 2 years, and should we wait a few months for interest rate cuts? Or? When should we move?
     
    Wanttoretire, 26th May, 2019
    #11
  12. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    in 2021 will the INVESTMENT loan be 5 or 10 years old ?

    ta
    rolf
     
    Rolf Latham, 26th May, 2019
    #12
  13. Wanttoretire

    Wanttoretire Well-Known Member

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    5 years actually up in April 2022.
    Then 25 years p and I. We will not qualify with a full app.
     
    Wanttoretire, 27th May, 2019
    #13
  14. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    all else being equal, you may be ok for a tick and flick extension at the time, since CBA IP loans are max 10 years io, with 5 + 5


    ta
    rolf
     
    Rolf Latham, 27th May, 2019
    #14
  15. Wanttoretire

    Wanttoretire Well-Known Member

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    Oh. Ok. But should I change to fixed io in meantime?
     
    Wanttoretire, 27th May, 2019
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  16. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    going to fixed IO for 2 or 3 years will lower your rate cost compared to current variable.

    I dont think u have a full 3 years IO left, so 2 years IO is the likely option

    As to if thats smart for you, and your circumstances, no one can really say per se

    ta
    rolf
     
    Rolf Latham, 28th May, 2019
    #16
  17. albanga

    albanga Well-Known Member

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    AMP now offering Investment rates against owner occupied at 3.74%.

    Bit of extra qualifying so won’t be for everyone but when the shoe fits that’s pretty tasty for a variable.
     
    albanga, 29th May, 2019
    #17
  18. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Only for shares though, not IPs or even holiday homes ...............unless we have had a change since last friday

    Odd one, but they tell me it comes down to ASIC reporting issues

    ta
    rolf
     
    Rolf Latham, 29th May, 2019
    #18
  19. albanga

    albanga Well-Known Member

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    Nope on investment properties again.
    Securities from what I understand need to be crossed, total loan above 750k and LVR on owner occ under 50%.

    As I said it’s definitely a small niche market but I haven’t seen lower variable investment rates.
     
    albanga, 29th May, 2019
    #19
  20. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Will chase BDM

    if the cash out is for buying an IP, why would it need to be crossed :)

    Poison that cross stuff, much of the time

    ta
    rolf
     
    Rolf Latham, 29th May, 2019
    #20
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