Macquarie for Debt Recycling

Hi All,

I'm working to re-finance current loan and set up a debt recycling strategy and have read through lots of the forum , re using AMP Master Limit & have at least a reasonable understanding of how to set that up, but cant find much on using Macquarie which seems to also be somewhat favourable for this strategy also & with significantly lower interest rates.

For the loan sizes I am looking at rates seem to be the below - but not 100% I am pulling this correctly.


AMP Master Limit - AMP Professional Package Home Loan - AMP

• PPR Comparison rate 3.54%
  
• Investment loan comparison rate 4.74%
  
• LOC comparison rate 5.03%

Macquarie Bank - Personal Banking Australia | Bank with Macquarie

• PPR Comparison rate 3.35%
• Investment loan comparison rate 3.65%

Is anyone using macquarie for debt recycling and could talk through how they have set it up and how they manage it on-going?

Pros and cons of Macquarie vs AMP for debt recylcing?

Assuming the above is correct , it would be a saving of almost 10k to use Macquarie so seems worthwhile to explore. Would love everyone's thoughts.

Cheers

 

Get some specific tax and credit advice from licensed professionals.


Most people are doing things wrong so you wouldn't want the blind leading the blind.

 

Macquarie is a great lender in many respects, but they don't do a master limit. Constantly readjusting balances isn't as straight forward with them as it is with AMP. This doesn't mean you can't debt recycle, it's just not as convenient (which can be said of any lender).

 

First up, forget about comparison rates, look at the actual rates.
AMP Master Limit is easier but not by much.
AMP's serviceability calculator is less generous than Macquarie's

 

Thanks for your thoughts Lindsay - is that because I am effectively double counting fees by looking at comparison rates?

Even comparing actual rates , master limit is significantly more expensive - im prepared for more effort if it means a significant saving

 

Comparison rates take into account the actual rates and fees over a specific period of time for a specific amount.

Those parameters were set over 15 years ago and today they accurately reflect the circumstances of almost nobody. Therefore the comparison rate isn't comparing the cost of the loan you'd end up with, it's likely to be completely inaccurate.

Also the rates being compared are the advertised rates, not the rates that can be negotiated.

 

All comparison rates are based on a $150,000 loan . A higher loan say $1M will be less affected by fees and more affected by the actual interest rate but this isn't reflected in the official comparison rate and neither is the fact that many comparison rates are based on the published rates not the negotiated rates.

 

Peter and Marty have answered re: the comparison rates above, I'll add that they're typically calculated based on the full loan term (30 years/25 years), who keeps the same loan product for 30 years? Almost no-one and especially irrelevant to someone like yourself who is potentially going to pay down the non-deductible debt quickly using a debt recycle strategy.
Slightly more effort required for Macquarie product but better overall borrowing capacity and cheaper in the long run could be more beneficial to your situation

 

DIY basis at this point & top tax bracket.
Thanks for your note, makes sense - good to know!!

 

Hi @Milltron ,

Who did you choose for your DR?