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End to interest only loans hurt investors but may create opportunity for first time buyers with help from the Bank of Mum & Dad

End to interest only loans hurt investors but may create opportunity for first time buyers with help from the Bank of Mum & Dad

Coronavirus combines with end to interest-only home loans in big hit coming for investors, experts warn

House prices are tipped to fall by 11 per cent over the next three years as the COVID-related economic downturn bites, and for one group of Australian homeowners, it could not come at a worse time.

There are an estimated 730,000 investors, many of whom are self-funded retirees or people planning for retirement, who have taken out interest-only bank loans in the belief property was a safe bet.

Coronavirus has already delivered challenges, including rent arrears and the prospect of losing their tenants altogether.

But now these private landlords are facing big hikes in their monthly bank repayments as they switch from interest-only to paying off the principal of their loans as well.

Tim K. Dean, Credi Founder | Commentator & Expert on Family Lending, Bank of Mum & Dad and Neo-Credit Scores is available for media interviews and appearances. More…

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