Join Australia's most dynamic and respected property investment community

Banks that capitalise LMI @ 95% on investment properties.

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

  1. mattyjh

    mattyjh New Member

    Joined:
    12th Feb, 2016
    Posts:
    2
    Location:
    Gold Coast
    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

    Joined:
    18th Jun, 2015
    Posts:
    3,411
    Location:
    Perth WA
  3. mattyjh

    mattyjh New Member

    Joined:
    12th Feb, 2016
    Posts:
    2
    Location:
    Gold Coast
    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

    Joined:
    18th Jun, 2015
    Posts:
    2,526
    Location:
    Sydney & Gold Coast
  5. Dmarkw

    Dmarkw Well-Known Member

    Joined:
    9th Aug, 2015
    Posts:
    73
    Location:
    Sydney
    Your LMI costs will be enormous though. They go up expodentially as you increase LVR.
     
  6. Terry_w

    Terry_w Tax and Structuring Lawyer Business Member

    Joined:
    18th Jun, 2015
    Posts:
    11,717
    Location:
    Southern Highlands NSW
    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

    Joined:
    18th Jun, 2015
    Posts:
    3,411
    Location:
    Perth WA
  8. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    2,526
    Location:
    Sydney & Gold Coast
    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

    Joined:
    18th Jun, 2015
    Posts:
    2,606
    Location:
    Canberra, Brisbane and Sunshine Coast
  10. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    696
    Location:
    Sydney
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,558
    Location:
    Melbourne, Nationwide
    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

    Joined:
    25th Jun, 2015
    Posts:
    123
    Location:
    Sydney
    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

    Joined:
    18th Jun, 2015
    Posts:
    193
    Location:
    Sydney
    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

    Joined:
    26th Jun, 2015
    Posts:
    153
    Location:
    NSW
    I got Liberty 5Y IO on 95$+LMI
     
  15. York

    York Finance Broker Business Member

    Joined:
    24th Jun, 2015
    Posts:
    1,673
    Location:
    Sydney
  16. Mr Dabolina

    Mr Dabolina Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    153
    Location:
    NSW
    bit higher than stnd @4.99
     
  17. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    2,526
    Location:
    Sydney & Gold Coast
    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

    Joined:
    18th Jun, 2015
    Posts:
    206
    Location:
    Sydney
    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 Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    1,258
    Location:
    Melbourne
    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

    Joined:
    18th Jun, 2015
    Posts:
    193
    Location:
    Sydney
    So basically the policy hasn't changed. :)