Switching from Interest Only to P&I Mid Term

[Purple Property]

I've fixed some loans for several years, they have 2, 3 and 4 years left on their term.

I want to change them over to P&I loans. Can I do this now or do I have to wait until their fixed term is up?

[Keys]

A good question. Is your bank following this thread? I suggest you talk to your bank in the first instance.

[orion]

I've fixed some loans for several years, they have 2, 3 and 4 years left on their term.

I want to change them over to P&I loans. Can I do this now or do I have to wait until their fixed term is up?

Should be fine to go on P & I now, most banks allow you to pay 5% off per annum without any penalty, apart from ASB.

[Bobsyouruncle]

Ask your bank they are the only ones who can answer you!

[Anthonyacat]

I recently did this with ANZ, had to work out a term that wouldn't pay off more than 5% in the coming year, and there was a $100 'loan change' fee, but they waived it for me. This is at their discretion though.

[Peter Griffin]

5% is the normal amount of principle that can be paid on an interest only Loan. ASB is different but still allow you to pay down Principle and I believe its a $1000 a month. Which in some circumstances would be more than 5%.

[Learning]

5% is the normal amount of principle that can be paid on an interest only Loan. ASB is different but still allow you to pay down Principle and I believe its a $1000 a month. Which in some circumstances would be more than 5%.

BNZ recently dropped the fee free 5% repayments off of their lower "classic" rate mortgages.

[Craig Pope Mortgages]

Hello, As mentioned in all the comments above, the solution probably depends on the bank you are with and maybe easier just to restructure one loan on P&I if the fees are high. There is probably an easy fix depending on the bank.
One other back up option is work out how much principle you may want to pay over the next 2 years (which is when the first loan is next due to review). Lets say its $30,000, see which loan has the cheapest partial break cost on the fixed rate, and break off a portion of loan and put it on floating, then credit extra principle payments into that new floating loan (paying down principle should offset the partial break fee on the 30k). Then when the 2 year fixed rate loan comes up, structure it in such a way that accelerates with extra principle being paid off if the bank allows(or keep breaking off a portion on floating and do the same again).

[Keys]

Did you know that the last dollar you pay off of a P & I loan has been interest only for the total duration of that loan?

Consider putting the extra money you would into that fixed loan onto one of your floating loans (if you have any).