Best bank to start your investment portfolio

Not a standard bank but the bank of "mum & dad". Usually able to borrow on favourable terms too

 

Without sounding harsh - you're missing the bigger picture. Focusing on rate isn't going to make you wealthy - you'll save a few dollars per month in the short term but that will likely lead to a sub standard financial structure that will limit the number/type of properties you can purchase.

Cheers

Jamie

 

Wait, are CBA still doing 95% for new clients?

 

Yep but no neg gearing over 90%

 

What does that mean? How do they prevent negative gearing from happening? I thought negative gearing just happens when your costs are below your rent for an IP?

 

What I mean is they don't include negative gearing in their servicing assessment. So you need to have particularly good income if you want to buy over 90% LVR.

 

Who takes NG into their serviceability calculations?

 

St George, CBA <90, Macq, Resi, NAB, Homeloans, Pepper, FirstMac, etc.

Some to varying degrees accept portions.

Its more who doesn't (Westpac!) than who does.

APRA did raise it as a red flag item, but many haven't really changed it all that much.

 

related to the topic here, I am currently with NAB for the OO loan. the loan is $490K but the house is ~1m now.
Last week I went to a branch to ask for top up my house and was told :
- I can apply top up when I want to buy an IP
- the rate for the top up is 5.xx% which is roughly 1% higher than my current loan rate.
is this a LOC loan? how to get a good rate for accessing the equity of my loan? Do I need to refinance to another lender to achieve that?
Thanks in advance.

 

NAB should allow you to release 100k in funds reasonably simply with no verification. It is a reasonably new 'equity release' policy.

If the purpose of the equity top up is to purchase an IP - than yes the investment rate will apply. Its about 4.76-4.83% (as of now).

If you want to release more funds than that and don't want to provide evidence of funds, then yes you can switch lenders to obtain funds more easily.

For example, CBA, ANZ, St George, etc will all give you funds without asking for verification of what you'll do with them. Just say its for future investment use and you should be fine. You'll have a small rate loading, but it will still very much start with a '4'.

Also be careful with the top up. If the purpose is for an investment, its best to do this as a separate loan rather than an individual top up. There are tax consequences, hence its best to keep the loans separate. If its for investment use and you do a top up of an owner occupier loan, you'll likely contaminate the loan and won't be able to claim interest tax deductions on the equity release portion. If you split it up, you can easily track whats investment and whats O/O.

Cheers,
Redom

 

You should find that the reduced rate creates a saving of more than the $395 package fee over a year.

 

They're quoting you their LOC product, which is probably unnecessary. Certainly you'll pay more for an interest only loan with the NAB, but in this scenario with the NAB you can get closer to 4.44% (NAB is increasing all their rates by 0.17% next week) with the right product and structuring.

 

Hi Azazel,

that's exactly what my broker said and I understand that. But my point is that I have another investment loan with HSBC where the rate is 4.05% and no annual fees. I find it a much better deal for a similar product and I now can put a price tag on asset protection.

 

Now this argument makes sense...

Cheers.

 

Hi, I appreciate this is a super old thread but some of the concepts discussed here are highly relevant.

Does anyone know what the latest thinking is re the "order of lenders" when starting a property portfolio? I suspect some of the comments on eg CBA and the like could be outdated by now too..

Or perhaps there is already a recent thread on this that I haven't been able to find...


Cheers and thank you all

 

Lending standards change all the time. Thats why you want a good mortgage broker who is on top of these things, and not a list. Find a broker that deals with investors longer term with multiple purchases.

 

Above is spot on.... depends on your situation and your strategy.....

 

It depends if you are going into LMI territory, your future ability to change lenders etc.

I don't think the order matters much