Interest only loan rate question??

[goughy]

Need an adjudicator! Rob says interest only loans are only ever on variable rates. I say they would usually be on a fixed rate.

Who's right? Are we both wrong?

[moree golfer]

Generally fixed rate terms but if you are using Bank Bills rolls/fixed period could be as short as 30 days.

[3oneday]

You can have both as far as I recall.

[BrisVegas]

they can be either I believe. My place was interest only for 2 years between buying the land and the house construction being finished. It's a common practice, as people are often paying rent + mortgage while they build.

[goughy]

I'm guessing that's what's going on with our place. I just figured the rate would be fixed, and Rob said they never fix rates on interest only.

So we're both wrong. I can handle that.

[henno]

Yep, you were both wrong. My mate has an interest-only loan, and it was fixed for a short period and then went variable.

And I think that arrangement was his choice - not in any way dictated by the interest-only deal.

[Ned]

You can have Interest Only Loans on both variable and fixed terms.

This facility is applicable to both mortgage and business lending.

You can also have some facilities where you can pre pay the interest amount.

Generally most banks will only allow you to have an interest only facility for a maximum of 5 years after which time if you wish to go IO again you would need to make some form of principal reduction.

[markTHEblake]

So we're both wrong. I can handle that.

Just dont admit that to her.