All Topics / Finance / Interest Only Term only up to 10 years? Can’t renew after 10 years.

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  • Profile photo of adam.padam.p
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    @adam.p
    Join Date: 2012
    Post Count: 22

    Hi guys,

    Recently I went to ANZ to change my loan into Interest Only loan, due to system error.

    Anyway, while talking to the manager, she said I can only have Interest Only loan for up to 10 years. After that, I can't renew it anymore. One things that pops into my mind is refinancing with different lender when that time comes.

    The question: Is it only ANZ that limit IO loan term to only 10 years? How about other lenders?

    Thanks

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi Adam

    I wouldn't pay too much attention to it – in 10 years time, you should be able to set up another interest only period. If not with ANZ, then with another lender.

    Cheers

    JAmie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of adam.padam.p
    Participant
    @adam.p
    Join Date: 2012
    Post Count: 22

    Thanks Jamie. That's what I had in mind.

    I just wanted to know if this is ANZ thing, not the same for all lenders.

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    As Jamie said, its not so much a problem and can be rolled over.

    But if a lender won't play ball, there's always another lender who will.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
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    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
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    Post Count: 5,069
    adam.p wrote:
    Thanks Jamie. That's what I had in mind.

    I just wanted to know if this is ANZ thing, not the same for all lenders.

    Some lenders will say that they won't extend an IO term past a certain number of years – but in reality, it's something that can be worked around.

    ANZ are a bit funny – they see changes such as reverting from P&I to IO as "credit critical" so ask for  a new application to be submitted. There's been moves to change this – and I've been told that these sort of adjustments can be made in branch now, but I'm still reluctant to send my clients direct to a branch to have them fiddle with their loan accounts.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    I am sure policies will change within the next 10 years.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Yes if it is anything like the UK there wont be anything like interest only loans in 10 years.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    Qlds007 wrote:
    Yes if it is anything like the UK there wont be anything like interest only loans in 10 years.

    Cheers

    Yours in Finance

    Richard, whats happened in the UK? Whats the average loan look like over there?

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

    Profile photo of s0805s0805
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    @s0805
    Join Date: 2006
    Post Count: 85
    Jamie M wrote:
    adam.p wrote:
    Thanks Jamie. That's what I had in mind.

    ANZ are a bit funny – they see changes such as reverting from P&I to IO as "credit critical" so ask for  a new application to be submitted. There's been moves to change this – and I've been told that these sort of adjustments can be made in branch now, but I'm still reluctant to send my clients direct to a branch to have them fiddle with their loan accounts.

    Jamie

    Hi Jamie,

    I am in process of getting this arranged and that is what they've advised me as well, more than 1 month in waiting not getting the docs right. The process change at ANZ is a joke and time its taking as well….what are you advising your clients full application OR have they started doing this in branch now?

    Cheers 

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    s0805 wrote:
    Jamie M wrote:
    adam.p wrote:
    Thanks Jamie. That's what I had in mind.

    ANZ are a bit funny – they see changes such as reverting from P&I to IO as "credit critical" so ask for  a new application to be submitted. There's been moves to change this – and I've been told that these sort of adjustments can be made in branch now, but I'm still reluctant to send my clients direct to a branch to have them fiddle with their loan accounts.

    Jamie

    Hi Jamie,

    I am in process of getting this arranged and that is what they've advised me as well, more than 1 month in waiting not getting the docs right. The process change at ANZ is a joke and time its taking as well….what are you advising your clients full application OR have they started doing this in branch now?

    Cheers 

    A lot will come down to who lodged the application and how it was presented. Every bank has it's issues with processing – but if the application is submitted correctly from the start, there's a much better change of it all going through without too much hassle.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of adam.padam.p
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    @adam.p
    Join Date: 2012
    Post Count: 22
    Jamie M wrote:
    s0805 wrote:
    Jamie M wrote:
    adam.p wrote:
    Thanks Jamie. That's what I had in mind.

    ANZ are a bit funny – they see changes such as reverting from P&I to IO as "credit critical" so ask for  a new application to be submitted. There's been moves to change this – and I've been told that these sort of adjustments can be made in branch now, but I'm still reluctant to send my clients direct to a branch to have them fiddle with their loan accounts.

    Jamie

    Hi Jamie,

    I am in process of getting this arranged and that is what they've advised me as well, more than 1 month in waiting not getting the docs right. The process change at ANZ is a joke and time its taking as well….what are you advising your clients full application OR have they started doing this in branch now?

    Cheers 

    A lot will come down to who lodged the application and how it was presented. Every bank has it's issues with processing – but if the application is submitted correctly from the start, there's a much better change of it all going through without too much hassle.

    Cheers

    Jamie

    The reason I was in the bank before were to change from P&I into IO. But this is mainly because I was promised IO loan but when it was very close to settlement date, they produced P&I loan and didn't have enough time to change it.

    After 5 months, I went back to the branch with different manager. There is no notes left in the system to change it to IO loan or even mentioning wrong loan being setup, so I have to fill up "Change of Request" form with reason as "Tax Planning". No other forms submitted.

    The process took 1 week to get it changed.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Sad old sight over the Terry.

    Maximum LVR 85% if you are lucky (odd exception where builders are trying to subsidise 10% on their own stock etc) and interest only loans almost a thing of the past.

    Simple lending formula of 3 x main income + 1 x secondary for borrowing and even with housing rates at 2.5% – 3.75% things still can get moving.

    For expats forget only 1 lender left interested in lending and maximum 65% lvr in selected parts of SE England only. Regretfully non resident is 2% higher so circa 5.5%.

    Still i guess when house prices in the main are a lot cheaper there than in Oz at 5.5% it doesn't look too bad. 

    Certainly with plenty of cash some cracking deals around.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of s0805s0805
    Participant
    @s0805
    Join Date: 2006
    Post Count: 85
    adam.p wrote:
    Jamie M wrote:
    s0805 wrote:
    Jamie M wrote:
    adam.p wrote:
    Thanks Jamie. That's what I had in mind.

    ANZ are a bit funny – they see changes such as reverting from P&I to IO as "credit critical" so ask for  a new application to be submitted. There's been moves to change this – and I've been told that these sort of adjustments can be made in branch now, but I'm still reluctant to send my clients direct to a branch to have them fiddle with their loan accounts.

    Jamie

    Hi Jamie,

    I am in process of getting this arranged and that is what they've advised me as well, more than 1 month in waiting not getting the docs right. The process change at ANZ is a joke and time its taking as well….what are you advising your clients full application OR have they started doing this in branch now?

    Cheers 

    Thanks Jamie/Adam….I've finally received the docs and ANZ advised they had to do the full application in my case (from P&I to IO) cause they call it 'Credit Critical' application or something….but atleast they've advise if i need to roll over my IO period after existing IO expires it should be fast tracked not full application….

    cheers….

    A lot will come down to who lodged the application and how it was presented. Every bank has it's issues with processing – but if the application is submitted correctly from the start, there's a much better change of it all going through without too much hassle.

    Cheers

    Jamie

    The reason I was in the bank before were to change from P&I into IO. But this is mainly because I was promised IO loan but when it was very close to settlement date, they produced P&I loan and didn't have enough time to change it.

    After 5 months, I went back to the branch with different manager. There is no notes left in the system to change it to IO loan or even mentioning wrong loan being setup, so I have to fill up "Change of Request" form with reason as "Tax Planning". No other forms submitted.

    The process took 1 week to get it changed.

    Profile photo of investilyinvestily
    Member
    @investily
    Join Date: 2013
    Post Count: 3

    Anz is particularly difficult – most difficult and awkward bank ive ever had to deal with. When i went from paying interest a year in advance to monthly they insisted I couldnt do interest only. It had to be pandi. Now i can apparently go iovbut i have to full out another complete loan application for a bloody loan I already have! Madness.Try someone else – anyone else. That would be my recommendation.

    Profile photo of Sure HarvestSure Harvest
    Member
    @sure-harvest
    Join Date: 2013
    Post Count: 15

    Adam, have you considered an evergreen LOC. These are designed on an IO repayment with some lenders requiring no review for 30 years (hence evergreen).  Rates can be slightly higher and qualification for a LOC can be more difficult today thanks to NCCP, but it achieves your outcomes as a set and forget IO loan.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Not sure if I'd be setting up a LOC to secure an entire  IP – it's an expensive option. For a smaller equity release possibly – to secure an entire property, no.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of adam.padam.p
    Participant
    @adam.p
    Join Date: 2012
    Post Count: 22
    Sure Harvest wrote:
    Adam, have you considered an evergreen LOC. These are designed on an IO repayment with some lenders requiring no review for 30 years (hence evergreen).  Rates can be slightly higher and qualification for a LOC can be more difficult today thanks to NCCP, but it achieves your outcomes as a set and forget IO loan.

    I have not, still have 9 years to go with my current IO loan. I'll worry about it later but still prefer IO with Offset. 

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