Hi, Couldn't find any calculators or posts for this scenario, but I thought it is quite common, so sorry if this is a duplicate post What's a good formula for working out borrowing power for someone who has a single investment property. E.g. property value : $800,000 loan remaining: $400,000 gross income: $100,000 Interest rate: $4.5% variable Other factors property weekly rent: $600pw strata levies and other expenses: $1200 pq Understanding is: equity is $400,000. What would be a safe amount to invest in a second property with good rental yield and avoid LMI?
You could potentially release $240k in equity by taking your borrowings up to 80% against that property. Whether the bank will allow it will depend on your borrowing capacity and their cashout policy. Cheers Jamie
Loan structure: Release another $240k loan or line of credit against your current property mentioned. Use these funds as a deposit for future investment. Obtain a separate loan for the future investment, secured only by the future investment. What to check/watch out for: Your borrowing power and rental yield required for the new purchase. Its hard to tell you has income is only half the equation. Run the numbers on this. The bank cross securitising your loan. If you follow the loan structure above carefully you won't be x-coll. Other: What are your longer term ambitions in property - it will bring the light on considerations like LMI's value, fixed/variable, lender choice, etc. Cheers, Redom
Thee is so much behind this question that a ball park borrowing figure isn't really going to answer your question - you are asking about borrowing power, LMI and safety - it's big picture stuff that really deserves an in depth conversation. Any of the above brokers would be great to chat to and will help clarify things for you.
You'll want to talk to a broker for even a ballpark idea–too many factors in play to give an accurate or appropriate answer. As Jess said, plenty of great brokers have responded above
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