Redraw access

Discussion in 'Loans & Mortgage Brokers' started by Clive Palmer's Yacht, 16th Mar, 2020.

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  1. Clive Palmer's Yacht

    Clive Palmer's Yacht Well-Known Member

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    Hi

    I have a redraw situation with ING (home, not investment side). I am toying with pulling the funds out - LVR still sub 50% after.

    Do you think this is sensible given the growing uncertainties? It would basically fund us through ~3 months if there was an unforeseen hit to the job situation.

    I'd prefer to leave it where it is, but am mindful it's not a offset account structure (I know, I know..)
     
  2. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    Yoiu could place the funds into a dedicated interest bearing account and offset the income with the interest on borrowings for tax purposes. The loan interest is likely blended but the % that relates to the new deposit can be ascertained.
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    You fearful of the lender cancelling redraw in these turbulant times?
     
  4. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    In Italy banks have suspended all mortgage repayments (personal and commercial) to leave liquidity in the economy. Britains RBS Bank has announced it will suspend interest and repayments for up to 3 months. It seems as the issue expands and deepens each nation may consider its own policies and support systems including social security etc I imagine aussie banks are considering this issue too under the guidance of the RBA and APRA to avoid threats to banking stability. Access to cash is a trivial part of a bank balance sheet. And with potential retail closoure need for cash may reduce. The RBA will release more notes and settle each day if they must. The RBA would have fears if the eftpos settlement system was at risk and this wont be allowed to occur. And try accessing cash from a bank these days...Robbing it is easier than asking for $10K

    If that happens here it may impact redraw balances first as these may reduce first. And could a lender suspend redraws for no rational reason ? Unlikley unless default occurs and then the account is suspended.
     
  5. Clive Palmer's Yacht

    Clive Palmer's Yacht Well-Known Member

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    Yes Terryw. Concerned they might do that - but equally hopeful they would leave it alone given my low 'gross' LVR (~45%)
     
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  6. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Compromise and take out some cash.
     
  7. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    I would be.
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    Yes it certainly is a possibility.