Split loans on PPOR

Discussion in 'Loans & Mortgage Brokers' started by Eddie_Greensy, 31st May, 2022.

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  1. Eddie_Greensy

    Eddie_Greensy Active Member

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    All,

    Would having an split loans on 620K (lets say 2 splits of 80K and 540K) PPOR IO with an offset has any benefits? now or down the track when the IO term is finished?

    Will appreciate any help!
     
    Eddie_Greensy, 31st May, 2022
    #1
  2. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    The only benefit of going IO is cashflow or If you do intend to convert it to an IO.
    Whats the purpose of splitting and going IO?
     
    Tony Xia, 31st May, 2022
    #2
  3. Eddie_Greensy

    Eddie_Greensy Active Member

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    The question is not purely about IO, its about aplit loan (x2) with an offset and whether there is any beneft at all? I was on x2 splits (90% fix and 10% var), now that I have refinanced, MB wanta to keep it still as two seprate vari loans.
     
    Eddie_Greensy, 31st May, 2022
    #3
  4. Terry_w

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

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    A benefit with debt recycling - saves you splitting later.
    Can help with an additional offset account with some lenders, in case you want to segregate savings.
     
    Terry_w, 31st May, 2022
    #4
  5. CharlieL

    CharlieL Active Member

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    Terry_W has some great info on debt recycling and related topics, well worth a read!
     
    CharlieL, 1st Jun, 2022
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    Terry_w likes this.
  6. Lindsay_W

    Lindsay_W Well-Known Member

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    No real difference or benefit, check you're not being charged double the fees for having 2 loan splits.
     
    Lindsay_W, 2nd Jun, 2022
    #6
  7. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    They would both just revert to P&I after the IO period has expired. Other than that - there's no real difference.

    There could be a debt recycling benefit if you were planning on recycling one of those loans - saves the hassle of splitting it out later.

    Cheers

    Jamie
     
    Jamie Moore, 2nd Jun, 2022
    #7