multi loans vs one big single one

Hi there,

I currently have 2 loans with ANZ @ 5.05 one is for 250k other is for 268k goal for the year is to pay them both down to 250k then get a revaluation on my properties and buy another one.

Instead of having 3 separate loans is it possible to put them into one and is having a bigger loan going to give you better bargaining power to chase a lower interest rate.

Thanks Matt.

 

That's the opposite of what you should do. Think about what happens if one goes down in value and you want to sell another?

Each house should have it's own. You'll still get bargaining power based on the total volume with them.

 

I'd add also that if your objective is to continue to grow a portfolio, the 'lowest' rate shouldn't really be the sole consideration. There are lenders better than ANZ for pricing, but their cashout policies, servicability calculators and customer service may be poor.
So it's best to consider all facets of a lender to allow you to continue growing. Also consider spreading your risk by using different lenders as you grow.

 

If I knock the total debt down to 500k I reckon the LVR would come close to 80% I know taking these to another lender will get better interest rate but because I have paid LMI already on 2 loans aren’t I better off leaving them with ANZ and just redrawing the back to LVR of 90%

Matt.

 

Think of the tax consequences of mixing loans
https://propertychat.com.au/community/threads/legal-tip-15-an-issue-with-mixed-purpose-loans-where-both-portions-are-investment.902/


And borrowing and incurring LMI when there is no immediate use of the extra funds.
Tax Tip 33: Deductibility of LMI
Tax Tip 34: Deductibility of LMI on loan increases
Tax Tip 35: Is LMI Deductible in These Situations?

 

Hiya

Best not to do that.

You'll be crossing up all your loans.

Call ANZ and tell them you're refinancing to another lender but wanted to see what they could offer first.

If they aren't willing to reduce - then check out what's on offer. Cba is currently dishing out a 1.5% discount on investor loans. Could be worth condidering.

Cheers

Jamie

 

Merging everything into a single loan is about the worst thing you can do for your investment strategy and probably for your tax deductions and overall financial well being. Everything about it favors the bank and there's no benefit to the borrower.

It's already been said above, but cross collateralisation is bad, no question about it. Just for fun, here's another extensive thread on the topic:
Cross collateralisation - 10 reasons to avoid