Join Australia's most dynamic and respected property investment community

multi loans vs one big single one

Discussion in 'Property Finance' started by 1stepcloser, 12th Feb, 2016.

  1. 1stepcloser

    1stepcloser Member

    Joined:
    4th Jul, 2015
    Posts:
    22
    Location:
    Perth
    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.
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,566
    Location:
    Adelaide, SA
    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.
     
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,156
    Location:
    Gold Coast
  4. York

    York Finance Broker Business Member

    Joined:
    24th Jun, 2015
    Posts:
    1,619
    Location:
    Sydney
    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.
     
  5. 1stepcloser

    1stepcloser Member

    Joined:
    4th Jul, 2015
    Posts:
    22
    Location:
    Perth
    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.
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,937
    Location:
    Sydney
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,138
    Location:
    Canberra and Sydney
    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
     
  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,090
    Location:
    Melbourne, Nationwide
    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