Splitting ppor

Looking at adding a investment split to my ppor to buy shares with. Currently owe 318k on ppor mortgage and a 86k equity release loan (they are both nab base variable rate home loan packages split from each other)

Ive read nab charge $10 per month per split? Do they still do this? Or can it be waived?

Can the split part still be linked to offset account?

 

Nab one of the worst lenders for this, you prob better off moving to get a lower rate and better features

Get some tax advice too.

 

how to find out if im locked in for lvr or policy? talk to broker or them directly?

 

I am with NAB and have recently split my ppor loan for the purpose of buying shares. It was a very easy process and there was no initial or ongoing charge to do this (I just double checked). A fee was not mentioned at any stage by the banker I dealt with or within the application documents.

I have a basic variable loan with no offset so perhaps your scenario may differ.

 

But didn't you get a split that was P&I instead of IO?
Ideally you want the new split to be IO and this is where it become a headache for NAB will most likely require a new serviceability assessment...
OP should speak to a broker to see what other options are available as there are much better products for this kind of structure, especially for debt recycling.

 

Yes it is indeed P&I. I should have thought a bit harder before responding!

In our case with a low tax bracket, one wage and small amount of shares purchased in both names, the benefits of IO would have been small considering the slightly higher interest. A monthly $10 fee may have put things about on par or slightly in the red.

For anyone interested, our strategy would be far from optimal for those on a high income but works well for us for now with a 85k income. We typically pay about 50% more than the minimum loan repayment (with extra of course going to non deductible debt). We also have all our shares set to DRP. It would be better in theory to collect dividends in cash, pay non-deductible loan and redraw for more shares but we are using the DRP as a sought of forced dollar cost averaging. Extra brokerage and procrastination on our behalf might even put us behind.

 

10$ monthly fee would be relevant if you had a NAB Homeplus product (which is now obsolete and as far as i am aware all legacy products have been migrated over)

Assuming you are under the tailored choice package, they do not charge monthly fees for having a split loan

The variation process should be straight forward if the request is straight forward in nature(i.e if the IO terms for the split are < Proposed IO expiry. My understanding is that NAB Broker now have a similar RTC form to complete the split the loan like NAB Redstar have atm...

 

Re NAB, would what @House or 2 has done (ie split loan) also be possible with PPOR P&I loan “with offset”?

Rusty as hell on loan stuff nowadays. That’s the problem with being basically debt free.

Thanks in advance.

 

Yes