The Teachers Mutual Bank Teachers Interest Only Home Loan is a home loan offered to owner-occupiers and investors which includes a period where you only have to make payments towards your interest. This can be beneficial if you are an investor looking to limit the amount of equity you put in your home, or an owner-occupier who is looking to keep their repayments to a minimum for a period of time. The interest-only period will depend on what type of borrower you are, with investors likely to get longer interest free periods than owner-occupiers.
There are significant downsides to paying interest only however. Firstly, loans of this type typically have a higher interest rate and this Teachers Mutual Bank loan is no exception. Secondly, because you are not paying off the principal during the interest only term you will ultimately end up paying a lot more interest back to the lender over the course of the loan. The 100 per cent offset account offered with the Teachers Interest Only Home Loan, can help reduce your interest payments through the balance of this transaction account, however this only works if you have spare cash to keep in this account.
The Teachers Mutual Bank Teachers Interest Only Home Loan offers a redraw facility which means you can access any extra cash you have made through extra repayments. It also allows you to take a repayment pause, however this pause can only be undertaken when you are making both principal and interest repayments. For first home buyers and investors alike, this loan only requires you put down a five per cent deposit on your property, but make sure you factor in the cost of lenders mortgage insurance if you have less than a 20 per cent deposit.
While the Teachers Interest Only Home Loan is good for new home purchases, refinancing and investing, you can also use this loan for construction during the interest-only period. There is also a portability option which would be good if you are looking to move within the term of your loan.
The Teachers Interest Only Loan is only good for educators in the Australian education sector or family members or partners of current Teachers Mutual Bank members.
The Teachers Mutual Teachers Interest Only Home Loan could be worth considering if you are already a member and are looking at an interest only option. However, it’s always a good idea to check the interest rate, fees and the conditions of each extra feature against your finances and needs to make sure you’ll come out on top, since the interest rate and total amount in fees you’ll be paying are quite high.
Read more about the Teachers Interest Only Home Loan option from Teachers Mutual Bank at the link below.
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