Options for Interest Only Loans Now That Big 4 Have Hiked I/O Rates?

What are mortgagors doing now that the Big 4 have all advised that they are hiking their Interest only rates.

I'm currently with ANZ and my rate will be raised to 4.55% for a 80% LVR I/O loan. It is 3.9% until sometime in July, when the new rate will take effect.

I've only had the loan for under a year as it was a refinance to ANZ, so have already copped some fees for the transfer to ANZ, and looking for some suggestions on who offers good I/O rates - and some recommendations from other OZBargainers

Any Mortgage brokers - happy for you to PM with your offerings (any based in Perth preferred)

Thanks

Comments

  • +2

    Switch to P&I as they are lowering rates here

  • Not looking to move to P&I just yet - looking for other I/O options now where rates are not already hiked and are under 4% or close to it

  • +1

    Depending on the specifics of your situation you ought to be able to do better than 4.55%p.a. if you are seeking an IO investor rate & you're willing to look at banks that are a little smaller (in Australia) than the big 4.

    Some examples:
    * 3.63%p.a. is achievable as a variable IO rate if you happen to be a high net worth investor.
    * 4.05-4.15%p.a. is achievable on 2 and 3 year fixed IO rates.
    * 4.39%p.a. is achievable at $500K borrowings as an IO variable rate and would come with a raft of rewards points/value adds.

    All of the examples above could come with some upfront rebate to cover switching costs - which, dependent on the loan size, would typically be in the range of $1000+.

    Hope this helps.

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