requirement to tell bank and refinance ?

Is there a legal obligation to notify the bank (and refinance) if an IP becomes PPOR ?
if there's no issue with making repayments can one just continue ....

 

It might be better if you do, the rates are often better for PPOR than IP

 

Why do you want to keep it as an investment loan? As mentioned above, cheaper rates for Owner Occ products, no need to refinance either

 

This would be a contractual matter with minimal consequences

 

No consequences, if anything you'd want to change it back to Owner occupied to save yourself a few bucks.

 

I'm just thinking if without the rent, the serviciability might be seen as an issue and I would need to pay down the balance before getting PPOR loan or refinancing. But I would like to keep as much as possible of the loan balance for debt recycling use

 

Ok I see why you might be concerned however in general switching the loan from IP to PPOR does not require a serviceability assessment, nor does it require you to refinance the loan, just a product switch so you will be fine there.
IF you wanted to borrow more money or change to Interest Only or refinance then that would trigger a new serviceability assessment.

 

But it'll have a negative effect on servicing, if he wants to squeeze one more out.

 

To be fair, the OP doesn't mention anything about borrowing more money.
Even if that's the case, the lender will want to see proof of rental income, if they're living in there and no rental income that would be tricky and deceptive.

 

thanks, I'll check with broker - would've though bank would want to reassess servicing loan is still okay going PPOR. If not that's good

 

Unfortunately with this current market, don't think I'll be investing and/or can borrow enough

 

They could simply ask for a rental appraisal and say they're just about to launch it on the market.

Not that I'm advocating for that, it's fraud!

 

i would never
but these days I think you need more then an appraisal to get over the line

 

Moot point then

 

I can see a day approaching where investors may need a lower LVR than owner occupied loans. In that case its possible that lenders will take a more active interest in investor use v owner occupier loans. I have a concern lenders could even seek to cross affected loans after the event. At present its not a major issue. This basis has been adopted in canada (lesser extent), new zealand and the UK.

 

Typically you need to show proof of rental outgoing's as well, ie. proof of the rent you're paying to rent somewhere other than that property.

 

In a way it's already happening here, most lenders cap LVR at 90% for investment loans but will go to 95% for owner occ