Loan set-up in the new APRA world

I am in the process of setting up a P&I loan with NAB with the following splits 400K, 150K, 50K.

In the near future I am planning to do some investments with splits 150K, 50K. Is there a way to setup the loan in such a way that the entire principal draw down is from the 400K split only (ie, for the total of 600K). I wish to keep the 150K and 50K interest only if possible. Serviceability is tight. I wish to know the options in the new APRA world?

 

Depends on LVR - under 80% you should be able to be IO on the 2 smaller splits. But they'll be IO then, not P&I, and you'll need to reapply for your loan. Change it now while it's still being set up.

 

60% LVR only. But the bank says, changing to interest only will reduce my borrowing power.

 

At this point, for a single property the NAB is a reasonably generous lender. They're serviceability is reasonable compared to many others but not as good as some when you're purchasing additional properties.

Interest only does make serviceability tougher than principal & interest, but on the first loan it's not a huge difference. The gap will widen in the future though.

There are a few that will lend more at this time but many of these come at a cost of some sort. Very difficult to make useful suggestions without having all if the relevant info.

If you're after interest only on any of the current loans in the future, definitely do it now. It sounds like this option may not be open to you in the future.

 

Yes it will. You sound like you'd do well speaking to someone about your longer term plans so they can map out a few purchases for you - the loss in borrowing capacity may not be an issue for you when using a few different lenders.