Best Way to Get The Best Deal on Interest Only Investment Loan

Llickjimmy1 on 22/07/2017 - 10:22

Hi all,

I have bought an off the plan apartment (for investment purposes) that is due to be finished in September (supposedly).

I have the below current loan rates with ubank, which seem reasonable (maybe not the absolute best)

3.74% for my ppr

4.24% for my 10% deposit for my apartment (interest only).

Now that I need to get a loan for the rest of the investment property (remaining 90%),what is my best move here?

1) just go to ubank to get the remaining 90% of my loan (although doesn't offer offset)
2) go to a broker and get them to find me a good deal? (I'm guessing this is the best move)

I would normally like to do the research myself to find the best deal (money magazine, online, etc), but finding it hard to find much information on interest only loans.

If a broker is the right way, what rates are people getting and from what banks? (would be good for something to compare against)

And any broker recommendations?

Any general direction would be nice too..I feel like I can't make my own decisions without checking ozbargain anymore :)

Thanks Fam

Financial

Comments

  • redfox1200 on 22/07/2017 - 10:45
    +1

    just tell the banks your moving in to that one and your renting out your current house

    • CyberMurning on 22/07/2017 - 12:04

      They need proofs

    • gimli on 22/07/2017 - 15:37

      also it may backfire with the tax man. If you try claim tax deductions.

      • redfox1200 on 22/07/2017 - 18:40

        wouldnt make any difference to the tax man, interest is interest

        • gimli on 22/07/2017 - 20:06

          i mean if you try to convince banks your investment property is a PPOR then there may be evidence for the taxman to use against you

        • redfox1200 on 22/07/2017 - 21:21

          @Gimli:
          the rental agreement would trump that, what is the taxman going to do? they only care about income/expenditure the only time they care about PPOR is when you go to sell when capital gains comes into account.

          From the banks perspective when you tell them you are planning on moving in they will assess your current house's rent potential in your application, then you just happen to never move in. As long as the bank is getting paid they won't care.

        • gimli on 22/07/2017 - 21:23

          @redfox1200: yeah i think you would be right.
          I'd just be cautious with doing that.

        • redfox1200 on 22/07/2017 - 21:27
          -1

          @Gimli:
          i agree it's not the right approach, but i don't see how it's fair for banks and the government to penalize investors, especially ones who have had existing investment loans for the last 10 years and aren't really contributing to the current market. it should really only be new loans that attract the higher interest rates.

  • Enzalicious on 22/07/2017 - 10:49
    +1

    Nab just put up my investment portfolio by .35% Accross all 3 of my investment loans. NAB basically said tough titties to me as they're tryibg to reduce their interest only loan portfolios.

    My highest rate at the moment is 4.75% for interest only. My lowest is 4.37. NAB can't explain to me why I have 3 different interest rates either.

    2 of my loans I was about to move to P&I so I should get a better rate.

    My broker is currently on holidays, and I've instructed him to move my entire banking portfolio away from NAB.

    So if you can get 4.24% for an interest only loan, I'd say you're already doing ok. If you can look at a P&I loan you'll get better rates.

    • lickjimmy1 on 22/07/2017 - 11:10
      +1

      Yeah that sucks… I am not sure if they will give me the same rate (4.24%) for the extra 90%, but might as well try by the sounds of it… And then if not try and get a broker to beat the deal they offer me

  • All Blacks NZ on 22/07/2017 - 11:48
    +1

    Keep in mind, the government is trying to slow investment lending and pushing interest rates high. Best interest rates will be on owner occupied property and P&I.

    • lickjimmy1 on 22/07/2017 - 19:56

      Yeah yeah thanks, was just hoping there was a way to at least get the best deal on a higher rate

  • ozshaz on 22/07/2017 - 12:42

    Just to clarify the loan arrangement, are you planning to get 90% interest only loan from Ubank ? If that's the case then I am not sure if Ubank does more than 80% LVR. May be my understanding is wrong so happy to be corrected.

    • lickjimmy1 on 22/07/2017 - 19:58

      Yeah the plan was for 100% lvr,just figured I was better off putting all the cash I had into my ppr and then I would have more to claim at tax time etc?

  • suti on 22/07/2017 - 13:07
    +1

    90% LVR Interest Only Loan….. Just the thing that APRA is trying to crack down on.

    But hey… property only goes up so you'll be fine right???

    • redfox1200 on 22/07/2017 - 13:31
      +3

      sounds like 100% LVR if the 10% deposit is at 4.24%

      • lickjimmy1 on 22/07/2017 - 20:01

        100% lvr was the plan (as per the above) … I get they are trying to crack down on them, just still thought it would be the best thing for me to do in my situation… No expert though.. And yeah, not sure if this was the best investment I have ever made anyway (brisbane, like everyone else).. fingers crossed

        • redfox1200 on 22/07/2017 - 21:23

          100% LVR is good for investment, i assume you have enough equity in your PPOR i.e 10-20% which will be secured for the new loan

  • Skramit on 22/07/2017 - 22:23
    +1

    I have my interest only investment loan with one of the majors at 4.69% with $0 fees.

    • lickjimmy1 on 23/07/2017 - 12:29

      Thanks. Good to know

  • happyhat on 23/07/2017 - 07:58
    +1

    I was in a similar situation with UBank, decided to check with a broker upon insisitance from one of my friends, way the numbers stack up with new rates in the market, Best solution for me was to move to P&I and fix for 2 yrs on investment 3.88%. PM me if you want broker details. I was very staisfied with their service, very knowledgeable, responsive and fast. Good luck!

  • Meho2026 on 23/07/2017 - 16:51
    +1

    I just refinanced and borrowed again with RAMS, they were cagey as about final interest rate which they can adjust from advertised rate. Ended up with 4.94% IO for investment with averaged 60% LVR. They are a bunch of incompetent crooks, in my opinion, I reckon if you are investor on IO take that rate as the max anything below and you're doing good

  • HeWhoKnows on 23/07/2017 - 22:14
    -1

    Good luck. The banks have closed up shop on interest only investment loans.
    Dont even go there!
    Get a proper principal and interest loan.

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