Why P&I loans are “rarely” a good idea

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APRA stunned most of us last month when they suddenly announced plans to review home loan assessment rates for residential borrowers.

The move, which will essentially result in Aussies being able to borrow more money, came just days after a federal election that saw the Coalition retain power – another surprising turn of events, as polling predicted a Labor win.

In our very first podcast, YIP Talk, we chat with Michael Beresf0rd, director – investment services at Opencorp, who shares with us why he was not too shocked about APRA’s news; in fact, he called it back in January. As well as explaining why the decision to loosen accessibility rates was “inevitable”, he offers advice for refinancers, and provides a compelling case as to why a Principal and Interest loan is rarely, if ever, a good idea.

We dig into the details to discuss:
•    Why APRA's recent decision to loosen accessibility rates was “inevitable”
•    The interesting timing of the announcement… just days after the election
•    The upshot for investors whose interest only loans are near their expiry; this news can only be good for those who wish to refinance
•    Why it is wise to refinance into another interest only period

On that last point, Michael offers advice for borrowers who own existing properties and are thinking of refinancing; he provides a compelling case as to why he believes a Principal and Interest loan is rarely, if ever, a good idea.

Listen to the podcast here.

Top Suburbs : spearwood , rockville , reservoir , westmead , emerald


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