Borrowing for investment

Discussion in 'Loans & Mortgage Brokers' started by zuzu111, 12th May, 2022.

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  1. zuzu111

    zuzu111 Member

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    Hi,

    Our we have a split loan on our PPOR:
    $470k fixed @ 1.69 for 2.5 more years
    $74k variable

    Value of home:
    $925k

    We're mindful of breaking our fixed term given how low our interest rate is, but we would like to purchase an investment property over next 6 months using our equity (if it's accessible)

    Have about $20k in offset.

    Is this do-able without breaking loan? Serviceability shouldn't be an issue in terms of loan repayments

    Cheers
     
    zuzu111, 12th May, 2022
    #1
  2. Terry_w

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

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    yes
     
    Terry_w, 12th May, 2022
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  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    your existing lender will likely allow you to take an equity loan secured only to the PPOR of 196 k at 80 % assuming your val numbers are correct and serviceability at the lender is met, which is very different than meeting loan repayments

    That new loan can then be used as deposit and costs for the new IP, and you can get an 80 % lend ( or higher with LMI) for the majority of the new property purchase, secured only to the new purchase

    ta
    rolf
     
    Rolf Latham, 13th May, 2022
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  4. zuzu111

    zuzu111 Member

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    Thanks both.

    I'm on 125k FT and Mrs 25k PT with one dependant and no debt, so should be ok for serviceability
     
    zuzu111, 13th May, 2022
    #4
  5. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    The only issue you might have is if the same lender who you have the low fixed rate with 1) does not allow cash out for the deposit loan before an IP is contracted or 2) doesn't think you service both the current and future loans.

    If they don't allow cash out you could still just do as a pre approval until the property is found.
     
    Marty McDonald, 13th May, 2022
    #5
  6. Lindsay_W

    Lindsay_W Well-Known Member

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    Yes, by accessing the equity via a new separate loan split.
    The amount you can access via this method depends on the lender and their specific policy, most lenders are OK with up to $100K, anything more than that is do-able but only with certain lenders.
    Who's the current lender?
     
    Lindsay_W, 13th May, 2022
    #6
  7. zuzu111

    zuzu111 Member

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    We’re with St George
     
    zuzu111, 13th May, 2022
    #7
  8. Lindsay_W

    Lindsay_W Well-Known Member

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    Pretty straightforward *structuring* process then, create separate loan split for equity release, St George will go up to $250K with no evidence required for purpose of funds.
     
    Last edited: 13th May, 2022
    Lindsay_W, 13th May, 2022
    #8
  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    STG and Straightforward = oxymoron :)

    ta
    rolf
     
    Rolf Latham, 13th May, 2022
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  10. Lindsay_W

    Lindsay_W Well-Known Member

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    What did you call me? :)

    Straightforward from a structuring point of view, actually getting them to pick up and assess an application is another story
     
    Last edited: 13th May, 2022
    Lindsay_W, 13th May, 2022
    #10
  11. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    St george has one of the best cashout policies right now.

    Get another loan split for the equity draw out, thus no need to break anything.
     
    Tony Xia, 13th May, 2022
    #11
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