The IO property cliff disaster? Fact or fiction

Discussion in 'Property Market Economics' started by Sackie, 1st Feb, 2020.

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  1. rhinsor

    rhinsor Well-Known Member

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    Is CBA still allowing this?
     
  2. Morgs

    Morgs Well-Known Member Business Member

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    Far as I know they are
     
  3. Heinz57

    Heinz57 Well-Known Member

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    Or you could lock in P & I fixed 2.59%
     
  4. MTR

    MTR Well-Known Member

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    Anyone having difficulties servicing debt now?
     
  5. inertia

    inertia Well-Known Member

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    Mines improved. One of my rentals had the rent increased by 10%, and I'm back working again.

    Cheers,
    Inertia.
     
  6. wylie

    wylie Moderator Staff Member

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    Ours has improved too. We locked in lower rates which offset the fact our seven loans all slowly came off IO. Had rates not dropped, we would have tweaked something to adjust to the new "normal".
     
  7. euro73

    euro73 Well-Known Member Business Member

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    Remember, servicing debt isnt the same as having servicing. Servicing debt requires you to pay "actuals" ... passing a servicing calculator requires that you demonstrate you can repay the actual debt at a much higher "deemed" or "sensitised" rate.....
     
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  8. Firefly99

    Firefly99 Well-Known Member

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    No, interest are so low, much lower than when we signed up to all the this debt 4-5 years ago so repayments have dropped heaps.
     
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  9. kierank

    kierank Well-Known Member

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    Yeah, these low interest rates are a bugger :D.

    Our previously negatively-geared portfolio is becoming positive.

    If this keeps up, we will soon be paying income tax.

    Bloody governments taking more of our money :rolleyes:.
     
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  10. Firefly99

    Firefly99 Well-Known Member

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    Exactly! Just did my tax this afternoon and found out that I made $1,200 off one of my properties despite the rent not going up in years.
     
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  11. Firefly99

    Firefly99 Well-Known Member

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    Also for those who were luckily enough to not have their income affected by COVID, they are spending much less and have extra cash in the bank. We normally do an overseas holiday each year and eat out quite a bit. Now just working and chilling at home and hanging at the beach. I haven’t filled the car with fuel in weeks. The mechanic called as my car was due for a service but it’s hasn’t done many kms so I put that off for 6 months. No paying for trains, lunch and coffee at work, etc etc. Yay COVID ;) (but seriously COVID sucks)
     
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  12. OzziMelbourne

    OzziMelbourne Well-Known Member

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    No difficulties. Three tenants in Melbourne and two in regional VIC are all paying rent. I have difficulties with borrowing :). My debt to combined wages ratio is 8, whereas tenants in 4 out of 5 properties have their rent equal or more compared to payments to the bank. But that 8 kills me instantly and challenges in getting one more property are really seen even with a deposit of 25%.
     
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  13. MWI

    MWI Well-Known Member

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    no, not at all, actually more favourable with refinancing to 2.69% IO fixed for 3 years, taking opportunity of lower IO rates, so more cash flow left.... All tenants paying, some increases in QLD in rents, all signing up long term contracts of 12 months....
    By the way had also formal valuations fro 4 QLD IPs refinancing, pulling out a title on one, having extra equity available too and was quite surprised with very favourable equity outcome.
    The only downside is...talking so much longer...as I was not a priority, not a hardship case. Started inquiry in May 2020 just now approved but still secured $4K payment to us too (via ANZ).
     
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