Loan question

Discussion in 'Loans & Mortgage Brokers' started by Jacque, 3rd Sep, 2005.

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  1. Jacque

    Jacque Jacque Parker Premium Member

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    This is a fairly simple question, but I really don't know the answer! And, it's bugging me....... :confused:

    If I top up on a current IO loan to draw down some extra equity (which I'm planning to spend on PPOR home improvements, for example) can I convert this portion only to P and I?
     
    Jacque, 3rd Sep, 2005
    #1
  2. D.T._

    D.T._ Well-Known Member

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    Hiya,

    I believe some banks will let you do it as another account. So in effect you'll have 2 loans.

    Eg House 500k
    Loan 1 = 350k IO
    Loan 2 = 50k PI same lender.

    That's similar to the way I'm setting mine up at the moment, I have a Lite loan from BankWest, and will get an Equity Release product ontop to make up the LVR I want, allowing me to invest further. Your bank would probably do the same, except just choose a PI product instead of an equity product like I did.

    Hope this helps,

    Cheers,

    Dave
     
    D.T._, 4th Sep, 2005
    #2
  3. Jacque

    Jacque Jacque Parker Premium Member

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    Thanks for that Dave :)
     
    Jacque, 4th Sep, 2005
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  4. eddievanhalen

    eddievanhalen Active Member

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    May depend on the bank , but some at least have a product that can compartmentalise loans within a loan. I am in the process of investigating refinancing options for my PPOR which is on P&I and Westpac have their Rocket Repay product that allows me to draw down equity as an IO investment loan within that one structure. What you are proposing is essentially the reverse so I don't see why it couldn't be done.

    Cheers,

    Ed.
     
    eddievanhalen, 4th Sep, 2005
    #4
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Hi Jax

    I assume that the security used isnt on the PPOR, in that case you must have a separate loan otherwise the thing will become a tax paperowrk mess anyways.

    PI is the soft option for most lenders so you should be fine

    ta

    rolf
     
    Rolf Latham, 5th Sep, 2005
    #5
  6. Jacque

    Jacque Jacque Parker Premium Member

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    Thanks Rolf :)
     
    Jacque, 5th Sep, 2005
    #6
  7. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    SOP. Split the loan and instruct accordingly. Easy peasy.
     
    Colin Rice, 8th Feb, 2014
    #7
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Colin, you are about 9 years too late!
     
    Terry_w, 8th Feb, 2014
    #8
  9. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Cheers Terry, good call that :eek:
     
    Colin Rice, 8th Feb, 2014
    #9
  10. jodie123

    jodie123 Active Member

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    Yep I've got a setup pretty much like this too. With ANZ, set it up so we could do renos on our PPOR.
     
    jodie123, 7th Mar, 2014
    #10
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