P2P Investors: How rollover loans work with your investment

We’ve started seeing our first group of Homeowner's loans roll onto principal and interest after their initial 12-month term on interest only. For those of you not familiar with the investment proposition for the Homeowner's loan, here are the basics:

• Investments made into this product are for an initial term of 12-months with an interest-only return of 6.0%*;
• After that term expires, the loan will roll on to principal and interest for a default term of 5 years.
• Near the end of the initial 12-month period, each investor in the original interest-only loan is given the opportunity to retain their investment(s) in the loan by cancelling the automatic sell order on those investment(s);
• If the investor cancels the sell order and chooses to retain their investment(s) in the loan, a new set of investments is created for that investor into the new 5-year amortising loan and the investor will receive a return of 8.0%* on those investments;
• If the investor does nothing, their investment(s) in that loan will automatically be put up for sale on our secondary market at the end of the initial 12-month term;
  • Assuming another investor is willing to pick up the investment(s) being sold, the investment(s) will then be sold;
  • The original investor’s principal will be returned with the new investor picking up a 5-year investment with a return of 8.0%* per annum;
  • No sell investment fees will be charged to the original investor for this sale process;
  • The original investor(s) will remain with the new 5-year amortising loan until their investment(s) can be sold on the secondary market.

So, if you’re looking for a way to invest your funds into a longer term investment at a great rate, simply cancel the automatic sell orders on your interest only investments when those emails come through. 

*Rates quoted were current at the time of writing, all rates subject to change and should be reviewed at the time of initial investment.

The opinions expressed in this article should not be taken as financial advice, or a recommendation of any financial product. Squirrel shall not be liable or responsible for any information, omissions, or errors present. Any commentary provided are the personal views of the author and are not necessarily representative of the views and opinions of Squirrel. We recommend seeking professional investment and/or mortgage advice before taking any action.

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