Anyone know how to use AMP Master Limit?

Does anyone have an AMP master limit and know how to use it? I've just moved my PPOR to AMP and trying to figure out how to debt recycle without creating a mixed loan.

Below is what I currently have:

I've found the master limit restructure request form online which is what I assume I need to use to change the splits.

Say for eg I have $70k in offset, -$300k in LOC and -$700k in P&I loan.

I need to pay $6,000 worth of expenses this week.. could I make an adjustment to increase the LOC limit to -$310k (thus reducing P&I loan limit to $690k), then transfer $10k into LOC but only use $6k of it now and use the other $4k progressively?

Alternatively, could I increase LOC by $50k to -$350k (thus reducing P&I loan limit to $650k), and only put $10k into LOC now, and use it? Or would that be creating a mixed loan?

ANy help would be appreciated! The last thing I want to do is create a mixed loan!!

 

Restructure requested generally take 10 business days minimum for amp to process.

You currently have two loan accounts. What's the nature of the borrowing?

The loans aren't showing any redraw. What's your master limit number? Ie is it greater than the current loan balances?

Also where did the funds in the offset account come from? Cash or borrowed funds?

 

Sorry should have clarified. The LOC is deductible debt at the moment (carried over from previous bank). The P&I loan is non-deductible, so trying to convert to deductible.

Funds in offset account = cash.

 

why would you use the LOC with its high interest rate?

To avoid a mixed loan you would need to split before paying the loan down and redrawing.

I wrote this a while ago:
Strategy: Using AMP’s Master Facility to Debt Recycle Strategy: Using AMP’s Master Facility to Debt Recycle

 

Out of curiosity what kind of rate are you getting? Do AMP offer any discounts from the rate advertised on their website?

I am thinking of taking advantage of recent market increases to try for a refinance

 

Is your master limit greater than the balance of the two loans? If so then you can restructure to create a new split from that unused borrowing limit. If not then you will need to pay down a portion of the non deductible loan, and split that loan down to the balance and then use the new split to borrow for your expenses.

Also Terry is right about the LOC. You should split that into a new P&I loan and leave the primary LOC at the minimum 10k limit.

I'd be cautious about doing changes to both the deductable and non deductible loans in the same restructure request though. The banks can and do screw up. Sequence it in a way that minimises the chance or impact of a bank screw up.

 

I was just talking to a client about an issue where they requested 2 sets of changes to be made, joining splits used by the wife into one split and splits used by the husband into one split. AMP instead joined some some of the wife's splits and some of the husband's splits together.

My suggestion is to give them one thing to do at any one time so its harder for them to stuff up.

 

No, my master limit is the combination of these 2 accounts.

I do recall reading that the LOC rate is higher than normal, so your suggestion makes sense. I also recall reading LOC needs to be minimum $10k.

So I should reduce LOC to $10k and create a $290k P&I split?

And noted re how to debt recycle - ie put say $50k into redraw of $700k loan then split that loan into $50k (deductible) and $650k (non deductible) and repeat etc.

 

P&I V 2.59%

LOC is 3.19%

 

That doesn't make sense. You would need to split before paying the loan down.

 

Why do you say that Terry? What's wrong with paying the loan down 50k and then reallocating the 50k borrowing capacity to a new loan split with a starting loan balance of 0 and then borrowing from that new loan split up to the 50k limit.

 

I suppose that could work, might be ok

 

Its worked for me!

 

If you had a mixed loan though you would want to split before paying into it.

 

Hi, just checking this is the right thing to do (ie create $10k LOC and $290k P&I split)? The P&I Split is an owner occupier loan but the funds have been used for investment so this is what makes it deductible right (usage, not name of account)..

 

Yep. First two times I asked for a restructure request everything was great. The third time, I think they put the work experience kid onto it - completely screwed it up (but didn't know about it until these random values appeared on loan redraw/maximum limits appeared. PITA to get sorted, and when I called them, I think another work experience kid was on the end of the phone line....)

 

That's what I would do! As above though, highly recommend you do this as a seperate restructure request from the restructure request to split the 700K P&I non-deductable loan for your debt recycling implementation.

 

how'd you go @Jmillar ?

 

Got it sorted. It now looks like this:

$10K LOC (deductible debt @ 3.19%
~$290k P&I loan (deductible debt @ 2.59%)
~$700k P&I loan (non-deductible debt @ 2.59%). Offset account sits against this loan to reduce non-deductible repayments

All it took was one form, and was processed in about a week. Fairly painless really.

I was thinking about fixing the $290k deductible loan to get a better rate, but I need to remain flexible for the moment as I have a few things happening. Plus, on $290k a 0.5% saving isn't substantial.

Thanks for all the help!

 

Excellent, as you have P&I loans your available redraw is going to shrink over time. But the beauty of the master limit is you can put in a restructure request to access available credit up to the master limit an allocate it to one of your existing splits or a new split to then redraw.