Looking to Refinance investment loans

Hi Experts

I have the following loans and structures:
PPOR: Paid off but held as collateral against investment properties (3)
Investment Property 1: Value approx 500k, loan amount 270k (Using PPOR as collateral)
Investment Property 2: Value approx 500k, loan amount 270k (Using PPOR and Investment Property 1 as collateral)
Investment Property 3: Value approx 430k, loan amount 260k (Using PPOR and Investment Property 1 and 2 as collateral)
Investment Property 4: Value approx 720k, loan amount 550k (no cross collateralization)

Currently with CBA paying 3.03% as a variable rate and 2.69% fixed rate on P&I

Is someone able to help with
1. Simplify the structure
2. Refinance the loans, get a better interest rate
3. Increase the new loan terms to 30 years, reducing my monthly repayment and increasing borrowing capacity to potentially take out another investement

 

Yes, a broker could.
You would want to restructure the security of those loans.

 

This looks pretty straight forward, subject to serviceability except for the fixed rate bit, when did you fix, looks recent based on the rate.
Good time to diversify into different lenders, having all with one is not ideal.

 

The rates you're paying aren't bad for investment loans. There's certainly better but there's also worse. I probably wouldn't recommend changing anything if the only objective was better rates.

The structure is likely to be a problem eventually however. Cross collateralisation is rarely the best solution. The sooner you're able to fix this, the better.

 

My goal is to simplify the structure more than get a 0.1% off the rates elsewhere (If i get it that's definitely a bonus). Another goal is to reduce monthly repayments by refinancing for max terms, so that my servicability increases. I'm looking to borrow for another property second quarter of next year.

 

Not saying that refinancing isn't appropriate, but the economics of moving for the sake of 0.1% savings on rates doesn't add up IMO.

Take one of the loans at $270k. A 0.1% savings equites to $270 per year. The cost of refinancing the property is usually about $700 - $1,000. There are various rebates around to cover this, but there's no guarantee that the most appropriate lender for your needs is offering a rebate.

In the grand scheme of things the rates you're on a reasonable and a better deal is unlikely to have any real meaningful impact. But definitely get rid of the cross collateralisation before you buy again.

 

Hey Simon,

That all looks do-able assuming your borrowing capacity is good. Definitely rewrite the loans back out to 30 years, and if you want to keep buying, paying interest only might be worth considering also - it'll let you retain more cash for buffers/deposits and also help when servicing gets a bit tight with the majors (which is probably not too far away unless you're on a hefty income.)

 

Thanks Jess, I was told going interest only might make it harder to borrow for another property?

 

Best speak to a broker to find out so you're not guessing.

 

Yes and no - yes with many lenders, but very much no with a couple of very useful ones that come into play when everyone else is done with you