We would like to extend the interest-only period on our home loan but our lender is now saying due to recent changes to the way they calculate how much we can borrow they won’t approve the extension.
The loan is $650,000 and the property would be valued at $800,000. Do all lenders use the same calculation process and will that stop us from refinancing?
Not all lenders are the same. It is potentially possible to refinance and gain a further interest only period. APRA has regulated that a lender or lenders representative (broker) must discuss and explain the pros and cons of interest only loans and that interest only should only be offered for an owner occupied loan for a legitimate reason.
I would be very happy to meet with to discuss your situation and provide options to you that may put you in a stronger position.
Please feel free to call my mobile 0435.474498 or visit our website mobilelender.com.au
As Scott has mentioned, lenders assess your ability to service the loan & the loan features differently. Scott has also alluded to the fact that all lenders are now obliged to undertake due diligence & clearly explain the issues that arise with an interest only loan.
Happy to discuss further. You can contact me on 0414 583 233 or at email@example.com
Different lenders have different lending criteria and what one is willing to consider, another may not. It's important to understand your reasons for wanting to have an interest Only loan and I'd be happy to have a discussion about this with you and give you some options. APRA (Aust Prudential Regulatory Authority) has tightened the rules for Interest Only lending recently and all lenders are affected by this. Interest Only lending for owner Occupied purposes is frowned upon now.
If you want to discuss what options are available, please give me a call on 0418.547337 or search for me through the "Industry Experts" tab and click on my business name under "Name of Business" and all my contact details are there. I would be happy to provide you with some quotes after haveing a chat with you.
Bayside Finance Group
Hi Katherine, further to the previous comments, depending on your debt reduction or cashflow preservation goals, you might also look into a split loan option - and get the best of both worlds. This can both preserve cashflow, continue paying down any bad debt as well as suitably position your borrowing capacity. Specific advice of course requires more details.