How to survive an expiring interest-only loan

According to a statement from Omniwealth Finance, there are steps borrowers can take to lessen the impact on cash flow:

1. Contact

Check in with your lender and confirm the date your interest-only loan ends. Then, set a reminder for three months before as to give yourself plenty of time to figure out where you can go from there.

2. Think

Take a step back and think if you want to continue with your current lender on a principal and interest loan, or if you want to continue reaping the benefits of an interest-only loan. If you’re happy with the lender, switching over to a principal and interest loan is an option, but if the appeal of an interest-only loan is something you are interested in, you may need to look for a new lender.

3. Search

If you want to find a new lender, you can take on the research process yourself, or you can use the skills of a mortgage broker to help you out. The statement from Omniwealth Finance noted that a complete review of your situation should be taken before acting, as it probably has been up to five years since the last review.

“As a borrower, it is always important to remember that you are in control of your mortgage and you don’t have to stay with your current lender. So, if you receive a letter telling you that you ‘must’ switch to principal and interest, review the checklist and weigh up your options,” the statement from Omniwealth Finance noted.

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