Equity release - top up with CBA of refinance with Suncorp

Discussion in 'Loans & Mortgage Brokers' started by Observer, 15th May, 2021.

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  1. Observer

    Observer Well-Known Member

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    22nd Jun, 2015
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    Location:
    Sydney
    Hi all,

    I'm looking for your thoughts on my situation with equity release for my PPOR. Last time I did valuation a few years back the value was $710k. It's 80% LVR loan, currently with CBA. We did full valuation with CBA last week which came back at $790k. We've also submitted a few desktop valuation requests with other banks and the highest of those came back at $850k with Suncorp.

    If we were to refinance with Suncorp:
    Pros:
    - Getting extra $48k in equity (e.g. $850k - $790k = $60k * 0.8).
    Cons:
    - Will have to pay about $2,500 total fees (CBA fixed loan break + refinance fees) as current PPOR loan with CBA is fixed.
    - Currently extended wait time with refinance applications of 10 to 12 weeks.

    If we were to stay with CBA:
    Pros:
    - Quick and simple process, faster equity release.
    - Pretty much no fees to pay (e.g. saving $2,500 in fees).
    Cons:
    - Not getting extra $48k equity.

    All the loan features and rates are similar with both.

    The purpose is to invest the released equity in the ETFs/LICs. I have done so in the past already, no concerns there.

    What would you do? Thoughts?
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Move to AMP and get a master limit :)

    ta
    rolf
     
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  3. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    If you tell suncorp or cba the equity release is for ETFs/LICs, there's a probability they won't even consider giving you the cash out.
     
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  4. Observer

    Observer Well-Known Member

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    Thanks @Tony Xia, we’ll work it out with them.
     
  5. Lindsay_W

    Lindsay_W Well-Known Member

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    Consider other lenders entirely and a structure that that is more beneficial eg allows you to debt recycle/limit rebalances
     
  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Suncorp will waive the annual fee for the life of the loan for refis - so that saves you a bit.

    Having said that - as a lender for investors - I prefer CBA. Their equity release policy, desktop vals, post settlement service etc are all superior IMO. You can debt recycle with them easily too - just submit a switch form to split a variable loan up.

    Cheers

    Jamie
     
    Observer likes this.
  7. Observer

    Observer Well-Known Member

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    22nd Jun, 2015
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    Location:
    Sydney
    Thanks @Jamie Moore. Yeah, I'm leaning towards staying with CBA.