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Interest Only or Line of Credit

Discussion in 'Property Finance' started by Raydar, 24th Aug, 2015.

  1. Raydar

    Raydar Well-Known Member

    Joined:
    6th Jul, 2015
    Posts:
    306
    Location:
    Newcastle NSW
    So i'm in the process of contacting my broker and unlocking my equity form my PPOR. The equity release should be enough for 2 deposits for new IP's.
    Should I release the equity to a LOC or two separate IO loans?
    Any pros or cons?
     
  2. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,756
    Location:
    Perth WA
    Personally, I'd just do it all in either a LOC or IO loan, then split afterward unless you're confident on the costs of each IP. If you split first you might find there's not enough in one split, or you could have two splits that are both only partially used.
     
  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    18th Jun, 2015
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    Location:
    Sydney
    Depends on the bank.

    Some banks allow IO loans to be operated like LOCs. You ideally want to pay for things directly from the loan account.
     
  4. Raydar

    Raydar Well-Known Member

    Joined:
    6th Jul, 2015
    Posts:
    306
    Location:
    Newcastle NSW
    Thanks Jess! Will take the suggestion onboard. Yes no firm Property at the moment so the cost is unknown at this stage.