Call to action
Borrowers on interest only need to check with their lender and confirm how long they have before the loan is reverted back to principal and interest in order to allow for the difference in payments. For an investment loan, if your bank refuses to extend the interest only period, other banks may be able to accept interest only for a further five years, however you as a borrower need to be very mindful that whilst on interest only, you are not reducing any of the debt and will need another exit strategy.
With banks continuing to tighten their lending criteria, trying to refinance could also pose a potential issue. So looking at your options sooner rather than later could save potential future cash flow problems.
If your mortgage provider does not help with your requirements, get in touch with your local mortgage professional who has access to a suite of lenders to see what other options you may have.
Raj Ladher from Tomorrow Finance is a mortgage expert with over 11 years' experience both in the UK and Australian mortgage markets. Accredited with the Mortgage and Finance Association of Australia (MFAA) and access to numerous lenders, Raj specialises in all types of mortgages, from first homeowners to investors increasing their portfolio. For more, email raj@ tomorrowfinance.com. au