SA Equity question

Hi all,

I’ve got a PPOR (148k owing valued at 220k), and an IP (215k owing valued at 240k purchased this year). I’m wanting to buy a more permanent “dream home” as my young family have outgrown our PPOR next year and I have a question about equity. I’m hoping to keep PPOR and use it as an IP, and keep our IP. So hoping to use equity and cash to purchase next property in a year or so. To buy our IP this year we used equity in PPOR to avoid LMI. So am I able to use equity again next year in both PPOR and LMI? Or because I used equity in PPOR this year am I unable to use that again for a purchase next year? Or how does this work? Thank you.

 

You can avoid LMI if your LVR is 80% or less
Across both properties you have loans of $148k+$215k = 363k
vals are 220k+240+ = $460k
LVR = 363/460 = 78%

You have 2% 'useable' equity if wanting to avoid LMI

So you won't be able to keep the LVR of the new one under 80%, unless you chip in some cash.

 

Just adding on what Terry calculated.

$460k - $363k = $97k ( Available Equity, you can only use 80% of this which is $77.6k)

$77.6k / 20% = $388k* ( Potential Purchase price )
of the new " Dream home " to avoid paying LMI.

* Subject to your serviceability.

 

Thanks for your reply, i didn’t word my question well. Basically, I used equity in PPOR to get the IP this year. I provided cash and equity to avoid LMR. My loans are with the same bank and I envision getting my next loan with them too. So, am I able to use the “same” equity in my PPOR again next year to help purchase next home? I hope this makes sense. Thank you.

 

My calcuations still stand as that is what I understood you were saying.

you can't 'use' the 'same' equity again.