Will changing from IO variable to PI fixed affect my next purchase?

I have my PPOR fully paid off, and 3 IO loans at variable rate for three investment properties. Two of the IO loans are collalateralized with my PPOR. All with St George bank.

Currently one of my IO loan (amount $950k) is 5.12%, which I want to change into PI fixed for 3 years at 3.99%. My cash flow is very comfortable to cope with this change.

My worries is that, after maybe less than 2 years, I would like to buy another property, but St George bank refuse to refinance; but I am not able to move to other banks as the PI loan is still fixed. This could be a cost for losing the potential opportunity.

Is it worthwhile to make the change?

Thanks,
Tahiti

 

You will need specific advise to determine if it is worthwhile. Find out your break costs and consider the tax issues.

And uncross those securities - totally unnecessary and dangerous.

Changing to PI will definitely make it easier for your to borrow for the next one.

 

No it wont - it depends completely on their borrowing capacity whether that's true or not.

Forward planning in this environment is complex and blindly following statements like that will end badly.

It's really important to realise that some (many) people who change to PI won't be able to change back easily so to maximise borrowing capacity it's really important to make sure you can change back to IO if necessary.

But completely agree re uncrossing - do that before fixing. Correct structure is more important now than ever!

 

No Jess is right. There are still some lenders that take actual repayments so if you have IO it can help borrowing capacity with these.