borrow against new purchase?

Discussion in 'Investment Strategy' started by CraigJ23, 17th Jul, 2021.

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  1. CraigJ23

    CraigJ23 Well-Known Member

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    I am about to a buy a PPOR property, which is being paid for by a home loan and a $400K deposit. The home loan is probably close to the ceiling of my serviceability.

    Is there any possibility that I will be able to borrow against the equity in the home, to buy an investment property? I imagine that I will need a 20% deposit in cash.

    Is this possible in my circumstances, and would it be advisable?
     
    CraigJ23, 17th Jul, 2021
    #1
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    In that case you might be stuck, but you can use potential rental income and potentially get over the loan.
    The problem will be the deposit, which you may not have so you would need to borrow against the existing property - which might mean a refinance if you have hit the limit with them.
     
    Terry_w, 17th Jul, 2021
    #2
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  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    If you are already at the servicing line with your lender, its unlikely you have the capacity to extract any equity since the rental income would need to be in the region of 10 % of the value of the IP to be self servicing

    But we dont know much about your personal circumstances so relying on feedback from here is probably not the best idea


    ta
    rolf
     
    Rolf Latham, 17th Jul, 2021
    #3
  4. CraigJ23

    CraigJ23 Well-Known Member

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    When you say 10% of the value of the IP, what do you mean? The annual rental income?
     
    CraigJ23, 17th Jul, 2021
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