St George top up

Discussion in 'Loans & Mortgage Brokers' started by Arthurark, 31st Mar, 2022.

Join Australia's most dynamic and respected property investment community
Tags:
Page 1 of 2
  1. Arthurark

    Arthurark Well-Known Member

    Joined:
    12th Aug, 2021
    Posts:
    440
    Location:
    Australia
    We settled on a IP when our borrowing capacity was low. So we used a 32% deposit. Our house has gone up in value but so has our borrowing capacity and would like to refi to 80% LVR and use the added equity to get another property/shares.

    this would be our first attempt at a top up refi. What are the downsides? Costs? And would it effect tax deductibility of the interest on the new loan?
     
    Arthurark, 31st Mar, 2022
    #1
  2. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,932
    Location:
    Australia wide
    too broad a question. please browse some of the relevant posts on the forum
     
    Terry_w, 31st Mar, 2022
    #2
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,634
    Location:
    Gold Coast (Australia Wide)
    ST George can always be fun.

    If the loans are correctly structured and used for tax deductible purposes, the interest may be tax deductible.

    Do you have any non tax deductible debt remaining on your home ?

    ta
    rolf
     
    Rolf Latham, 1st Apr, 2022
    #3
  4. Arthurark

    Arthurark Well-Known Member

    Joined:
    12th Aug, 2021
    Posts:
    440
    Location:
    Australia
    Our broker tends to favour them! We currently have 295k principal remaining on the investment loan.
     
    Arthurark, 1st Apr, 2022
    #4
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,634
    Location:
    Gold Coast (Australia Wide)
    Reason I ask is about the non tax deductible debt and your possible shares purchases.

    You may be a candidate for an active debt recycle strategy which may help you pay off your home sooner.

    SGB isnt great in this space since they killed their portfolio LOC set up which allowed an ok Active Debt recycle strategy set up.

    Problematic I believe, last I checked STG had a max of 4 loan splits, which isnt suitable for such a strategy for most borrowers over time

    ta
    rolf
     
    Rolf Latham, 1st Apr, 2022
    #5
    Arthurark likes this.
  6. Arthurark

    Arthurark Well-Known Member

    Joined:
    12th Aug, 2021
    Posts:
    440
    Location:
    Australia
    Thanks for your input. I will talk to my broker about this. Normally i've been given the best advice but as things get more complex I want to ensure everything remains efficient. Any useable equity we can obtain would be used for additional investment.
     
    Arthurark, 1st Apr, 2022
    #6
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,634
    Location:
    Gold Coast (Australia Wide)
    NOT saying you have been provided advice that doesnt meet your stated goals at the time, product works fine for an equity pull, but less so for an active debt recycle strategy which can go hand in hand with equity drawn for shares.

    More equity deployed to shares can speed the process, but not useful if one cant recycle the extra franked dividend income through a tax efficient structure - ie reduce owner occ debt and pull out of a new loan without a loan app, 2 or 3 times a year or more often depending on personal circumstances

    ta
    rolf
     
    Rolf Latham, 1st Apr, 2022
    #7
    Arthurark likes this.
  8. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    5,058
    Location:
    QLD/Australia Wide
    Why?
    St George really don't like cash out for shares, especially if it's more than $100K
     
    Last edited: 1st Apr, 2022
    Lindsay_W, 1st Apr, 2022
    #8
    Terry_w likes this.
  9. Arthurark

    Arthurark Well-Known Member

    Joined:
    12th Aug, 2021
    Posts:
    440
    Location:
    Australia
    What about cash out for further properties?
     
    Arthurark, 1st Apr, 2022
    #9
  10. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    5,058
    Location:
    QLD/Australia Wide
    Why does it have to be with St George? Better rates and options out there.
    Any cash out/equity release >$100K St George are no good, in my experience
    Suggest asking your broker why they favour St George over all other lenders.
     
    Lindsay_W, 1st Apr, 2022
    #10
  11. Arthurark

    Arthurark Well-Known Member

    Joined:
    12th Aug, 2021
    Posts:
    440
    Location:
    Australia
    Thanks. I will ask the question. Cash out would be under 100k, but only just.
     
    Arthurark, 1st Apr, 2022
    #11
  12. Terry_w

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

    Joined:
    18th Jun, 2015
    Posts:
    41,932
    Location:
    Australia wide
    ST G are pretty slow, suffer highish rate and are pretty inflexible in terms of products. They can be good for trusts or construction type loans but we generally avoid using them.
     
    Terry_w, 1st Apr, 2022
    #12
  13. Arthurark

    Arthurark Well-Known Member

    Joined:
    12th Aug, 2021
    Posts:
    440
    Location:
    Australia
    Hi all you are right about St George. They’ve basically denied a cash out, despite easy eligibility and serviceability. Broker is now searching other lenders. Sounds like you were right about St G not liking cash outs
     
    Arthurark, 5th Apr, 2022
    #13
    Lindsay_W likes this.
  14. beachgurl

    beachgurl Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,320
    Location:
    Sydney
    Stg is one of the worst when it comes to variations on existing loans. If you can service with stg you pretty much have every other lender on your broker's panel to choose from.
     
    beachgurl, 5th Apr, 2022
    #14
    Terry_w likes this.
  15. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,163
    Location:
    03 9877 3000
    This is one of the reasons I'm reluctant to do anything with St George (Bank of Melbourne down south). As far as investment strategies go, they're a bit of a dead end and outside of a bribe (the cash back) they don't really have anything decent to offer.
     
    Peter_Tersteeg, 6th Apr, 2022
    #15
  16. Morgs

    Morgs Well-Known Member Business Member

    Joined:
    7th Dec, 2017
    Posts:
    1,807
    Location:
    Sydney NSW
    Maybe I'm the exception but I find they've got a great level of credit risk and great pricing for >$1M aggregate lending.

    Cash out >$100K has never been a good place for them but they have a new cash out policy as of this week; can't speak for how much better it is in practice as we have used it yet.
     
    Morgs, 6th Apr, 2022
    #16
  17. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    10,634
    Location:
    Gold Coast (Australia Wide)
    ST George have a place for some of our clients, bread and butter PPOR and Investors, thats better elsewhere usually.

    Good Mat leave, most recent years financials, bridging and retained profits with a part shareholding in the one application scenario is one example.

    ta
    rolf
     
    Rolf Latham, 6th Apr, 2022
    #17
  18. Ruby Tuesday

    Ruby Tuesday Well-Known Member

    Joined:
    8th Mar, 2021
    Posts:
    1,479
    Location:
    Danistan
    I found BoM which is just Vic branding of St George was the only bank keen to give me $200k for investing in shares using property for security.
     
    Ruby Tuesday, 6th Apr, 2022
    #18
  19. Ruby Tuesday

    Ruby Tuesday Well-Known Member

    Joined:
    8th Mar, 2021
    Posts:
    1,479
    Location:
    Danistan
    Brokers either said this couldnt be done or wanted to charge a $10k fee. I just asked my bank they refused at first , I asked for break fees and told them I wanted to break my fixed loans, I got a phone call from senior management who asked some questions then gave me $430k for a property and $200k for shares.
     
    Ruby Tuesday, 6th Apr, 2022
    #19
  20. Lindsay_W

    Lindsay_W Well-Known Member

    Joined:
    1st Jul, 2015
    Posts:
    5,058
    Location:
    QLD/Australia Wide
    BOM is not a branding of St George (they're owned by Westpac, who also owns St George) and they do have different policies, which is Why BOM could do it but St George wouldn't.

    There are plenty of other lenders with better rates that will allow much more cash out than that too.

    OP is better off using a completely different lender.
     
    Last edited: 6th Apr, 2022
    Lindsay_W, 6th Apr, 2022
    #20
Page 1 of 2
Financial Advice – Do you need help

Do you need help with investment strategies, don’t want to buy the wrong stocks, or you just need a regular income stream? We provide the research to ensure your investment selections achieve the goals. This is the value of advice.