50-year mortgages pitched at investor market

First Permanent is offering an Australian first, a 50-year investment mortgage, lending up to 106 per cent of the property value and all government charges, with no additional collateral of any kind required.

Ian Grant, First Permanent's managing director, said "Our loans are a stepping stone for Australians to get into the property market, and we clearly do not expect anyone to ever stay in a loan for the full 50 years.

"Our experience has been that the average First Permanent borrower refinances to a lower rate in less than two years, at which time they have built up equity in the property from capital growth and repayments".

The full documentation investment loan comes with limits, with NSW capped at $1 million for houses and $850,000 for units, with Victoria slightly lower at $800,000 and $700,000 respectively.

Grant continued, "The loan feature allows borrowers to act quickly to purchase bargain investment properties because they do not have to waste time having two properties cross collateralised or deal with multiple lenders.

"First Permanent provide a three-year, interest-only option for approved investors."

"It also provides a psychological peace of mind for many first time property investors because the family home is not directly on the line."

Formerly a division of Devine, Merrill Lynch bought First Permanent earlier this year.