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  1. #1

    Default Interest only Mortgage issues

    Hi All
    I started property investment about 4 years ago. I now own 3 properties in Auckland, and everything is going well. However, all 3 loans are on interest only, but that will start to change at the end of 2020 (and roll over to P&I). Put simply, I can not afford to pay P&I, the rents will simply not cover it.

    I was told early on that I could keep my mortgages on interest-only by simply refinancing at another bank when the interest only term expires (5 years). My mortgage broker now tells me, this is highly unlikely due to the banks reluctance to hand out interest only Mortgages.

    My questions are….is this true? Has anyone here got the same problems, and what did you do?

    If this is accurate info, I am in a situation where I may need to sell at least 2 of the homes, or maybe all 3. Any advice would be most welcome.

    Thanks in Advance
    Johny

  2. #2
    Join Date
    Jun 2004
    Location
    Kapiti
    Posts
    631

    Default

    Sounds like you are doing well. The good news here is there is plenty of time to negotiate with a number of banks. I don't use brokers, and a good segment of my lending is interest only.

  3. #3
    Join Date
    May 2008
    Posts
    3,691

    Default

    I've always been interest only and whenever the interest-only period ends, I am always able to roll onto another interest-only period.
    I've been doing this for 17 years.
    I've never used a broker.
    I'm with ASB.
    So in answer to your question: I have never had your problem.
    Do mortgage brokers taint investors?

  4. #4
    Join Date
    Jan 2012
    Posts
    1,112

    Default

    Following the trend I've also had 12 years of intrest only. Through BNZ and no broker.

  5. #5
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    901

    Default

    Have you worked out how much principal you need to pay ?
    If the loan period is long the principal portion is very small and you may be pleasantly surprised how little you need to pay.
    Have you discussed this with your bank manager ?

  6. #6
    Join Date
    Mar 2015
    Location
    Brisbane Wellington Auckland
    Posts
    901

    Default

    Four years ago the rents would have been lower and interest rate higher.
    Did you repay a bit of the debt with this profit?

  7. #7
    Join Date
    Jul 2017
    Posts
    305

    Default

    What is your LVR?

    Those able to refinance on interest only such as Bob and Learning may have lower LVR levels, as they have been investing for a longer period and have enjoyed rising property prices, as well as an increase in rents from their purchase date.

  8. #8
    Join Date
    May 2008
    Posts
    3,691

    Default

    Avoiding brokers might be the secret to property investment success.

  9. #9
    Join Date
    Sep 2008
    Location
    Tauranga
    Posts
    1,535

    Default

    Just in the process of testing that as we speak. Just had one rollover and the other one due.
    Also want to borrow some for reno's that have to be done.
    Will see how we go. Income ok and LVR just under 50%.

  10. #10
    Join Date
    Sep 2008
    Location
    Tauranga
    Posts
    1,535

    Default

    Yep only ever had one that did any good and that was way back in the cCountrywide days. Excellent bank they were.


 

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