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Banks that capitalise LMI @ 95% on investment properties.

Discussion in 'Property Finance' started by mattyjh, 12th Feb, 2016.

  1. mattyjh

    mattyjh New Member

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    I'm currently looking to finance an investment property @90-95% LVR. Just wondering what banks will capitalise LMI for investment properties?
     
    Last edited: 12th Feb, 2016
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    CBA will, up to 95%. Some of the smaller ones will too - BoQ springs to mind but only if you're willing to wait 5 weeks for assessment.
     
  3. mattyjh

    mattyjh New Member

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    Hi Jess,

    CBA told me they only go up to 90%. I'm actually thinking i might go to 95% so I'll check BoQ out.

    Thanks
     
  4. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    @mattyjh, CBA will go up to 95% (including LMI) but they have some postcodes they won't go above 90% + LMI on.

    Liberty will do 95% + LMI but must be P&I if investment.
     
  5. Dmarkw

    Dmarkw Well-Known Member

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    Your LMI costs will be enormous though. They go up expodentially as you increase LVR.
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    ME bank and Banwest too I think go to 95%.
    ANZ for existing customers
     
  7. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    The person you spoke to is wrong. :) Check CBA before BoQ, they're much better for investors and if you're paying that kind of LMI you'll want to choose wisely.
     
  8. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Indeed they do - 88% is the sweet spot before things get out of control.

    And a high LVR means being bound to the same lender for longer (or potentially paying LMI again elsewhere), no top ups for a while etc.

    However, it can make sense in some cases e.g. enter market sooner, to preserve a larger buffer, to retain cash to add value, to allow a subsequent purchase etc. On lower-priced properties the dollar amount of LMI isn't as ludicrous either.
     
  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Keep in mind that you need to demonstrate 10% gen savings with CBA and no neg gearing allowed on servicing calc when borrowing 90% +

    Cheers

    Jamie
     
  10. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

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    Lots of lenders that will do it in theory but chuck in credit scoring and DUA and it suddenly becomes a little tricky.
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Yes, to the point where you're really only borrowing about 1.5% more with the CBA than you would on a 90% + LMI loan. At this point you pay higher rates with the CBA as well.

    To put it in perspective, the difference between the two scenarios on a $600k property is coming up with another $9k out of your pocket.
     
    Drgonzo likes this.
  12. andrew_t

    andrew_t Well-Known Member

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    Not a bank but Qantas Credit Union will do up to 95% + LMI according to the website

    Am in a similar position as originally posted, anyone have thoughts on QCU?

    Thanks
     
  13. mja

    mja Well-Known Member

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    Are ANZ doing 95% again? I had two IP I/O loans approved in Nov/Dec 2015 for a max of 88%...
     
  14. Mr Dabolina

    Mr Dabolina Well-Known Member

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    I got Liberty 5Y IO on 95$+LMI
     
  15. York

    York Finance Broker Business Member

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    Rate?
     
  16. Mr Dabolina

    Mr Dabolina Well-Known Member

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    bit higher than stnd @4.99
     
  17. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    That's interesting @Mr Dabolina. I'm assuming it was the Liberty Star product? What was the postcode?

    I had a 95%+ LMI IO IP loan pushed back, being told that all IP loans had to be P&I at 95%+ LMI. I questioned the policy as it seemed to contradict the Star product but was told the same thing by multiple folks on their end.
     
  18. Mick C

    Mick C Well-Known Member

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    Liberty uses 2 LMI funders, QBE and Genworth + their own "risk fee ( in liu of LMI)...if you dont state which LMI/risk fee your using than they will use their standard policy of 95% + LMI @ P/I .

    However if you tell them you want the QBE one or risk fee one, it's I/O :)

    Existing customers only of ANZ-can go to 95%.
    New customer 90% Max.

    But 88% is the "sweet spot in term of LMI cost" and credit scoring.
     
    Redom likes this.
  19. tobe

    tobe Well-Known Member

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    ANZ only do 90% max for investors, regardless of how long they have been a customer.

    they haven't updated their back end properly, the LMI calculator still shows 97%, but its definitely their current policy.
     
  20. mja

    mja Well-Known Member

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    So basically the policy hasn't changed. :)