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Refinancing and LVR

Discussion in 'Property Finance' started by akaBen, 11th Feb, 2016.

  1. akaBen

    akaBen New Member

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    Sydney
    Hi all

    I'm refinancing my PPOR and investment property and wanted to ask for advice from people a lot smarter than me, aka everyone here!
    When I refinanced a year ago I had my PPOR valued at $975k and borrowed $750k against it. That was in 3 splits which now stand at $513k, $190k and $31k. Paying P&I, and nothing left in offset.

    My investment property loan is $632k and property was purchased for $790k one year ago. Interest only on this loan.

    I have a very good offer from one of the big 4 and want to refinance and pull out the equity. PPOR is now valued at $1.1 and investment around $900k.

    Would like advice on how to structure the loan, and also if I should go up to 90% LVR as the bank will not charge any LMI up to 90%, and interest rate is 3.99% on both loans!

    Appreciate any advice on this or if anyone is happy to chat privately let me know!

    thanks
    Ben
     
  2. tobe

    tobe Well-Known Member

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    go up to 90% on both and make sure they are separate securities, not crossed.
     
  3. Redom

    Redom Mortgage Broker Business Member

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    That is a great offer. 90% no LMI at 3.99. Take it.

    Set up a separate investment split against your O/O for the additional equity thats available. Best to have access to it for future investing.

    Don't cross both the loans.

    So it should look something like this (actual amounts depend on vals):
    • PPOR loans, As is, secured only by your PPOR.
    • Investment LOC/Split - for remaining equity available against your PPOR.
    • Investment loan - As is, lower rate. Secured only by the investment.
    • Investment LOC/Split - for remaining equity, available, against your Investment.
    Depending on your plans, discipline and goals, and if the option is available to you, potentially I/O repayments on the O/O loan, with extra repayments done via the offset account.

    Cheers,
    Redom
     
    Jason Tyrrell and York like this.
  4. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Hi Ben, are you like the head doctor of the St Vincent's or something? Very good offer 90% no MI and 3.99%
     
    JacM likes this.
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Keep in mind the tax aspects too.. Dont increase existing loans but get new splits
     
  6. York

    York Finance Broker Business Member

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    Sound like a great deal. Can you share which of the Big 4?
     
  7. akaBen

    akaBen New Member

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    thanks all!!
    And unfortunately not open to public, I work for said bank and they have a staff deal going on where they will match or beat your current home loan with about 9 other banks. I was about to refinance with BOQ at 3.99 when this deal came up and to my surprise they matched it, and the 90% LVR is an added bonus!
     
  8. Marty McDonald

    Marty McDonald Mortgage broker Business Member

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    Ohhh yes the old staff discount with no FBT implications as was on offer in the market. Smart
     
  9. akaBen

    akaBen New Member

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    Hi all (again), I got my loan offers and valuations back:

    Property 1 owned in my name only, bank valued at $1.15mil, loan offer $800k
    Property 2 in both names (me + fiance), $925k bank valuation and loan offer $830k

    Interest only on both loans

    Property 1 has 3 splits owing, $511k, $189k, $31k (currently P&I)
    Property 2 interest only $632k

    So what would be the best way to structure the loans?

    Thanks again
    Ben
     
  10. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    This is a bit of a vague question and you should seek specific tax advice and credit advice to answer it.
     
  11. akaBen

    akaBen New Member

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    Hi Terry

    Can I be more specific or give more info? I got a few answers after my initial post so I thought the valuations and the loan offers would be the final piece of information needed to get an idea of loan structure?

    Property 1 loan will increase from 731k (511 + 189 + 31), up to 800k
    Property 2 loan will increase from 632k to 830k

    At a guess,
    Property 1, would I be best to keep the 3 splits on the original loan and have a new split of $69k
    Property 2, would I split into 2 and have the original 632k and a new split of 198k?

    I'm moving from 2 different banks to one new one (if that makes a difference).. What else would I need to take in to consideration?

    Cheers
     
  12. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You should have a read of all my tax tips. There must be about 50 of them just on deductibility of interest. Also see the ideal loan structuring tip in my signature. If you want specific advice I could offer you a consultation to go through it all.