Interest only

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Do you have an “Interest Only” mortgage? Do you know when the interest only period expires? Many IO borrowers remain underprepared for the step-up in repayments they will face when their loan switches to Principal and Interest (P&I).

The lack of understanding around interest only loans in concerning, particularly with many people having little understanding of what their mortgage repayments will look like should their loan switch to P&I.

Banks are now more reluctant to roll-over interest only loans, meaning many borrowers will be required to pay an extra 30 to 40 per cent in annual mortgage repayments once their loan switches to P&I.
With a lack of refinancing options available many mortgagors may have to significantly pull back on their spending, could fall behind in repayments or potentially even need to sell their property.
Review your mortgage arrangements, speak with your bank or mortgage broker to ensure you are not leaving yourself exposed to interest rate rises or changes to your mortgage structure.


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