Refinance Loan dilemma - please advise

Discussion in 'Loans & Mortgage Brokers' started by IPpanther, 19th Aug, 2021.

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  1. IPpanther

    IPpanther Member

    Joined:
    19th Aug, 2021
    Posts:
    15
    Location:
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    G'day Guys,
    We own PPOR and an IP where current loan structure is:

    Investment loan with Macquarie : $600k
    2.49%
    2yrs fixed P&I, 30 yrs term
    Just started few months before.

    OO with CBA : $534K
    2.68%
    Variable P& I, 27yrs
    Offset is $450k

    Planning to do KDR at OO place and new construction loan to apply is 1m. So we are thinking to refinance existing loans (of CBA) and apply new construction one.

    Based on current picture, it seems Westpac looks like good option which also gives $3k cashback. Westpac gives:
    Refinance (of CBA, OO) : $534k, 1.89% fixed 2yrs, P&I
    Construction: $1m, 2.39% variable P&I, 100% offset.

    Q1) Does the above refinance from CBA to Westpac and construction loan approach looks good based on the above numbers? Or should look at any other big bank?

    Q2) What do you recommend for Investment loan with Macquarie ($600k)? Should we break the 2yrs contract and move it to Westpac as well? Need to consider exit charges of Macquarie and any new cust cashback deals of Westpac or anyone else.

    Thank you very much for your feedback.
     
    IPpanther, 19th Aug, 2021
    #1
  2. Terry_w

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

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    You need specific licensed credit advice.
     
    Terry_w, 19th Aug, 2021
    #2
  3. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

    Joined:
    23rd Aug, 2015
    Posts:
    1,588
    Location:
    Bella Vista
    If the total loan will be $1.534m you'll have to make sure the valuation stacks up, which is about $1.92m.

    Q1- yes it's decent, but remember the construction loan ( not Inc land) will be interrst only during construction.

    Q2 - this shouldve been structured to IO to begin with as you have an OO loan.
     
    Tony Xia, 19th Aug, 2021
    #3
  4. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
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    Posts:
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    Location:
    Gold Coast (Australia Wide)
    A little gotcha with many KDRs is the land value of the vacant land.

    They often fall over because there isnt enough value in the land alone to have the current loan at 80 % lvr.

    Sounds like you should be ok with the cash holding, but its one of the things we would look at first before even considering a lender thence structure mix.

    Another important consideration for that amount of future non tax deductible debt would be - is an active debt recycle structure something for you to help you save a few or many years off your mortgage repayments

    ta
    rolf
     
    Rolf Latham, 20th Aug, 2021
    #4
    Lindsay_W likes this.
  5. Lindsay_W

    Lindsay_W Well-Known Member

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    Get a broker or risk limiting yourself/structuring incorrectly, it's important to get it right.
     
    Lindsay_W, 20th Aug, 2021
    #5
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