Can You Get An Interest Only Loan Forever? | Ep. 37

In this episode, we are once again joined by Josh Graham from Roost Mortgages. And we discuss whether you can get an interest-only loan forever. The general rule of thumb is that an interest-only loan period will run for 5 years. At the end of those 5-years you can apply for another 5-year period.  However, the bank will always consider whether you can afford the higher principal and interest payments once the interest-only period has finished. This is because once the interest only period has finished you will need to pay off the principal of the loan over the remaining period. For instance, if you took out a loan on a 30 year term and went interest only for the first 5 years, you would need to pay down the principal in the remaining 25 years after the interest only period has finished.  We also discuss interest only mortgage calculators, and why investors use them i.e. to limit the contributions they need to make to the property.