Easy question for getting most loan out of bank

sorry basic finance question here. So in general banks loan up to 80% of property whilst avoiding LMI. I keep reading strategy of loaning '105%', whilst keeping the 'surplus' cash in offset account, using bank's money to pay stamp duty etc and maximise available loan amount. So how do these 2 concepts work together ?
Say I want to purchase property for $100k. I have $25k in savings, in which $20k is for deposit and $5k for purchasing costs, the loan expected is $80k. So am I asking the bank for $85 k and keep $5k in offset account ? Will the bank give the extra $5k without more fees ? Or am I totally off here ?

Thanks

 

Terryw’s Ideal Loan Structure

Start here...

 

It's fairly simple - to borrow '105%' you need to have a second property with sufficient equity that you can setup a second loan tied solely to that property which will provide the 20% + government charges.

For example:

Property 1
Purchasing property for 500k
80% LVR Loan: 400k
Government Charges: 25k
Total Deposit Required 125k

Property 2
Property Value: 500k
Existing loan: 250k
Equity Release Loan applied for: $125k

With some lenders you can otherwise use a term deposit as security if you do not have a second property to draw equity from - however this can be expensive in that you're effectively giving the bank money via a term deposit which you will receive a significantly lower return on interest earned vs the interest you will pay on the loan.

 

okay thanks for comments, I'll check out Terry's posts
So the 105% is not on IP to be purchased, but existing investments

 

The 105% would be the total borrowed, which might be split up along the lines of 80% secured against one property, and 25% against another property.

 

Correct. It all comes down to risk - banks want a margin of the property paid off so that in case of repossession they're likely to recover the funds they borrowed to you and any costs.

 

Aaaah okay. So this strategy is really just about using released equity in another IP to pay for deposit and purchase cost.
Cool

 

You borrow 80% against the property you're purchasing and 25% against a property you already own.

Cheers

Jamie