Loans all with one bank or not

Dear forum, I am doing some planning for structuring my loans at the moment. I want my loans across a couple or a few banks, at least not all loans with one bank. It is only an instinct, to not keep all eggs in one basket, not based on reason.

Can anyone suggest a few reasons why one shouldn't keep all loans with one bank ?

Thank you

 

Cross securitisation is an issue, although it can be avoided even when all loans are with the one lender.
However the 'All Monies Clause' is the issue

 

Keeping things separate is a useful risk management tool. A bank that holds all your properties and loans is holding all the cards. If things go badly everything is exposed.

There's lots of legitimate reasons why portofiols tend to graviate towards a single lender, but if you can diverisfy across several lenders I'd say that's preferental.

 

There can be issues with more than one lender if that lender policies imapct borrowing. eg STG bank decides no equity outs. However that property is mortgaged with STG while another is with NAB. This may encourage refinance to NAB with costs, fees etc. Can also be one bank issues where they may just say no and offer no concessions on rate etc. Minor fee concessions can occur with same bank eg One $395pa fee etc. Perhaps even competitive pricing based on total lending.

Definately a issue to make your broker aware of to limit such issues as crossed loans and all monies clauses

 

I have written some legal and loan tips on this before on the forum

generally with the same lender is preferred for retirement planning as it is easier to swap securities which can help with social security law and selling but keeping loans open. But the all monies clause means this is a higher risk

 

You can avoid cross coll whilst having all loans with one lender.

If your properties are sub 80% LVR - it's also easy enough to refinance a property to another lender down the track (if you choose to).

Having multiple loans with one lender can also result in a bigger rate discount across your portfolio and a reduction in ongoing fees (you might have one annual fee - rather than multiple across numerous lenders for instance).

There's also nothing wrong with spreading the love among multiple banks if that's the path you choose - it all comes down to the individuals needs.

Cheers

Jamie

 

Many have loans across different lenders due to cashback deals, fixed loans which are left alone, difficulties with refinance v a new loan etc

All in the days life of a broker to consider. Worst outcome seems to be those who DIY loans then post here about how to fix what could have been avoided in the first place by not DIYing. Often because they need fast action now...Pay for it later ?

 

This is not my experience, even with loans less than 40% LVR and the further you go down the track the more difficult it can become. If you have all your loans with one bank they can have you by the short and curlies,and not give you any discounts. I have found circumstances that allow refinance only happen on average about once every five years.. I have found with two banks one will be encouraging me to move my other loans with incentives. I would never have all my loans with one bank again, especially with falling or stagnant property values , bear sharemarket, rising interest rates and living expenses. Dont understand what the issue is with security substitution is, done it multiple times with multiple banks with out issue. I think it is probably easier rotating banks, than doing it more often with the same bank because the longer the gap the lower the LVR, and different banks are more co-operative at different times.

 

I have to say that I don't agree that cross collateralisation is inherently bad. It definitely can be, but that isn't always the case.

 

I agree, but in 99% of cases it's not necessary and brings no benefit, so why risk it?