Debt recycling

from top down features to look for if you want to use an Active Debt recycle strategy - that is regularly invest in equities from recycled money.

Master Limit - allows you to redraw any principal paid, during the Master Limit period, while still having the capacity to have the majority of the non deductible debt on low rate PI with the majority fixed. As far as I am aware, only AMP has that combo

Limit Swap - allows one to have just 2 loans to do active debt recycling with, rather than regular split downs every 3 to 6 months using. Mac and BWA allow this, as do a couple of No Banks.AMPs version is even better for many on higher tax brackets since one can limit swap from OO PI to INV IO

Capacity top split loans down......into smaller splits - most lenders will allow this, some have limitations on the number of loans - eg STG - max 4 splits - workable for some, dog for others

Loans aint loans.

ta
rolf

 

Yes and no

Product and Feature wise the AMP set up is " the best"

However there are some things that can be problematic

Some are

Vals............if u have a val thats 100 k higher from Active Debt Recycling Lender X than AMP......then often the extra gearing is worthwhile

Fussy on cash out, up tp 100 k is ok, beyond that, unless one has been trading shares for a little while, is under the guidance of a planner or can obtain an accountants letter its near impossible to coax them to release more than 100 k per app.......

If one has a lot of available and accesible equity lenders like Mac and BWA ( and ANZ and NAB) are a lot more flexible in this regard, and if one is a DIY recyclers without previous share experience they offer more value overall

Servicing ...... Because the Master limit is effectively an IO loan for the entire facility, the loan is serviced over 25 or 20 vs 30 years ( AMP will allow ML up to 10 years). If one is tight on servicing, BWA is often a better fit, or even one of the non banks depending on LVR, Mac tends to have a low risk appetite so if your DTI is north of 6, they are harder on both cash out and sub 70 % lvr

Once again, loans aint loans, and there is no "one fits" all

ta
rolf

 

I have an obvious commercial Bias.............that to me seems an odd way to go about what your are looking to do.

Most Bankers wont have a clue about this stuff, its not their job.

I can save you the work on the Master Limit question - its AMP or AMP

Also most brokers dont know either, since they dont work in conjunction with a planner that can make this stuff work well for those that dont want to DIY - most brokers are "transactional" and

Having said that, I know most brokers on this forum are not "transactionally " based and would have a reasonable to great knowledge of how to out this together

ta
rolf

 

Depends on what you are looking to achieve ?

If its an education around lending structures to support an active debt recycle strategy id say no - it would mean you and your service provider would be blind to what is best for you.

ta
rolf

 

Good luck with that.

After 21 years of doing this sort of work, most folks dont know what they dont know, and even we get it wrong sometimes due to unforeseen circumstances.

Looking to amass bits of intellectual property into a personalised strategy doesnt look to be that useful, may work may not.

Its not rocket science, and it is simple but not obvious.

We often inherit stuffed up structures, even where lenders like AMP or Mac have been used

BTW not fishing for your business, we are busy with people that are needy in terms of time and advice and use a specialist in the area of what they are trying to achieve.


PS What is the right structure for you and why ?

ta
rolf