Join Australia's most dynamic and respected property investment community

Borrowing Capacity among the Major

Discussion in 'Property Finance' started by Xsi, 21st May, 2016.

  1. Xsi

    Xsi Member

    Joined:
    17th Apr, 2016
    Posts:
    21
    Location:
    Melbourne
    Does anyone know if there is a significant difference between the borrowing capacity of the 4 majors now?

    When I plug in numbers into the online calculators of CBA I get an extra 200k over the calculator from NAB. The questions for each calculator are slightly different, but essentially capture the same information. I previously thought NAB had the best borrowing limit among the majors. Is this not the case anymore?

    Thanks.
     
    Last edited: 21st May, 2016
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    Depends - those online calcs are junk. Usually, CBA and NAB have the most generous calcs, but it depends on whether you have over time, existing debt, and more. They are not such a black and white answer.

    Best to get a broker to run your scenario through the calcs the lenders actually use rather than the overly simple ones online.
     
  3. Xsi

    Xsi Member

    Joined:
    17th Apr, 2016
    Posts:
    21
    Location:
    Melbourne
    Thanks Jess. Even with the simplest scenario(no overtime etc), the difference seems to be significant between the two.

    From past experience, I found that when you walk into a branch, the borrowing limit seems to significantly less than what you can get using the online calculators(guessing a result of factoring in a lot more detailed information).
     
  4. Simon Moore

    Simon Moore Mortgage Broker - Melbourne Business Member

    Joined:
    4th Mar, 2016
    Posts:
    220
    Location:
    Melbourne
    The CBA online calculator is totally wrong, it used the Standard Variable Rate (5.62% for investors) as the assessment rate, the rate they actually use is in the mid 7%s.
     
    Keystone likes this.
  5. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    Ha - yes, it's a marketing tool more than anything, designed to get customers to go into a branch. If it looks like they'll lend more than everyone else, it's an easy win.
     
  6. Shahin_Afarin

    Shahin_Afarin Residential and Commercial Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    641
    Location:
    Sydney
    Often its not about who will lend you the most money but which lenders to use at what stage of your portfolio. Then add multiple layers of loan structure, security type, valuation, cashout policy and a hundred other considerations and then you can determine the right lender.

    So you may end up going with a lender like say Westpac that is going to lend you less on purchase 1 but having a lender like say NAB up your sleeve allows you to do purchase number 2. Whereas if you were to use say NAB for purchase 1 you wouldn't be able to purchase a second property.

    This is of course an example as there are other more generous lenders than NAB and this is a good example of where a strategic broker (rather than a transactional broker) like Jess can put you in the right direction.

    Last thing you want to do is snooker yourself on a purchase - definitely worthwhile talking to Jess about it.
     
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,140
    Location:
    Canberra and Sydney
    Nab is generally the most generous out of the 4 when you've got an IP or two under your belt. Cba prob comes in second. ANZ have always been the least generous - but aren't too bad if it's just the one owner occ purchase.

    All in all - don't rely on DIY servicing calculations. Hit up a decent broker if you want accurate calcs.

    Cheers

    Jamie
     
    Beanie Girl likes this.
  8. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,949
    Location:
    Sydney
    It varies from client to client, but I have recently had some where CBA was on the more generous side.
     
  9. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    Avoid the online calculators - they're sales tools which spit out meaningless numbers which don't reflect accurate results.

    In terms of lenders, CBA + NAB are generally the best in terms of servicing within the Big 4 for most scenarios, but each scenario is different and you can see any of the lenders trumping others with specific policy.

    Have a chat with an investment focussed broker who understands investment focussed finance strategy, not just sorting interest rates from lowest to highest.