When should you go with P&I?

Finally, my interest only period expired.

I can choose to extend at 3.8% (costing me $250 fee), but the lower interest rate on P&I is tempting at 3.16%. It would save me about $2000 a year in interest.

We can easily afford the higher monthly repayment.

Question: Should I stay with the P&I and reapply for IO only should I need to to increase my borrow capacity when I next look to borrow???

Thanks

 

Go for the lower interest rate ...when you see something to buy and need cash ..pull some equity out ....been doing this for years ...touch wood ..never been turned down by the bank ...yet!!

 

work out what your PI repayments would be if you extended the loan term back to 30 years. Prob just slightly above what the IO repayments would be anyway.

 

Is that for your home? If it is, unless it's about to become an INV, I would go P&I. That's a big saving and the additional cost is unlikely to be huge unless you've only got a short term left on your P&I.

 

Ideally refinance to original loan term and switch to P&I - repayments will probably be much the same as what your paying now. Not worth being on IO when the rate difference is that high. Do a simple excel model and see what option makes most sense.

 

Where can you get 3.16%?