I'm a owner occupier I've been in financial difficulty I'm with a major bank on interest only payments ATM will this stop me getting a better rate I'm on 4.6 because it was a no doc loan it was for 105.000 I'm down to 94,000 I'm on a pension?

Hi Nicole

Thank you for your question.

If as you’ve outlined your existing loan is an interest only lo doc loan I’d suggest 4.6% is a pretty good interest rate in today’s environment. As a guide, a number of lenders have recently increased the interest rates on their full doc interest only loans and as you be aware lo doc loans generally attract higher rates.

Another issue you might find in the search to refinance is the financial difficulty you mentioned. It is very difficult to refinance a loan where a customer is experiencing issues in meeting their current commitments.

I’d like to you encourage you to communicate regularly with your existing lender and perhaps request a discussion with them to work out a plan to help you get back on track. All lenders will or should respect such circumstances and willingness to communicate.

I hope this helps. Best wishes

Paul