Potential loan structure for PPOR

Hello all,

I'm in the market currently to purchase a PPOR and was thinking about loan structures. So I've come up with one below and as I've never done something like this can someone please provide some feedback as to whether the structure is possible or its going to cause any issues or if I'm completely off the mark around structuring

Split A 660K P+I with offset , variable rate
Split B 300K P+I , fixed rate
Split C 25K , IO , variable rate
Split D 25K , IO , variable rate
Split E 25K , IO , variable rate
Split F 25K , IO , variable rate


Splits C,D,E and F are there if I ever decide to do debt recycling.

Thanks heaps!
Val

 

Hi Val

Why not just go to a lender that allows the flexibility to make changes to the loan structure down the track?

Without knowing your specific circumstances, its hard to say if this is suitable.

 

You can do this, but how well it works will depend on lender.

Depending on your scenario and the lender you choose, you have options to

• Get a product that's specifically designed for debt recycling
• Get a product that will split adhoc, with no additonal costs
• do it your way.

If the lender you choose can't transact out of the loan directly you'll need offsets for C,D,E and F to help keep the paper trail intact so the deductibility is clear if you're ever audited.

 

Yes, that is possible. But more importantly which structure is suitable to you depends on what you're planning to do specifically. Ideally, you want to be able to add splits if required while being cost effective at the same time. There are particular products that are good for this.

 

Ok, so sounds like getting a flexible product is more beneficial thing to do.

Cheers

 

Not much logic there, simply thinking of covering 50% of variable component against any potential rate rises.

 

Yup, lets see what RBA does or what the banks do irrespective of RBA!