All Topics / Finance / Maximum LVR on a Refinance??

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  • Profile photo of wannabewealthywannabewealthy
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    @wannabewealthy
    Join Date: 2004
    Post Count: 5
    April 19, 2007 - 10:40 am

    Hi,
    We have an investment property in Brisbane that was previously refinanced to a new lender after a renovation approximately 18 months ago. The new loan was financed Interest Only at 90%. 

    The area has had some price growth in this time and we are looking to refinance again to draw out some equity (to buy another property of course).  However, we have just been informed that if we get a revaluation and refinance again, the maximum LVR we can get on the new valuation (and for any refinance) is 90% (we wanted to increase to 95% to make the most of the extra equity), 

    Can anyone offer advice on this, or has anyone been through this. We had never heard of this before and always assumed that you could go to whatever LVR you wanted as long as you were prepared to pay the mortgage insurance.

    Advice appreciated. Thanks for reading!
    Jason and Emma

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213
    April 19, 2007 - 12:49 pm

    Hi

    That is correct. Generally for refinances the maximum is 90%, though there are a few lenders that go higher. I cannot think who at this moment. ANZ was one, but I think they have changed policies. Royal Guardian may be another. If you are prepared to pay about 9.5% pa, I think there is even on 105% loan that allows refinances.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    April 19, 2007 - 10:42 pm

    Anz will certainly go to 95% LVR on a refinance we do that often.

    Richard Taylor | Australia's leading private lender

    Profile photo of v8ghiav8ghia
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    @v8ghia
    Join Date: 2005
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    April 20, 2007 - 12:58 pm

    Yep – much over 90% can be a challenge now, when there is debt consolidation in particular. Maybe your val will come in well. All the best. A full doc loan with what was once considered a 'non conforming ' lender can often yield competitive rates and results, (ie Liberty ) but many lenders have indeed changed their LVR now on refi from 95 to 90 – yet you can buy at 95 for an IP or 100% LVR PPOR no drama. It's a funny industry……

    Profile photo of wannabewealthywannabewealthy
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    @wannabewealthy
    Join Date: 2004
    Post Count: 5
    April 21, 2007 - 9:41 pm

    Hi guys,

    Thanks for the info. It seems crazy to me that you can borrow up to 100% on a purchase, but most lenders will only let you go to 90% on a refinance. Perhaps we might look at different lenders (like ANZ) for our next property so that we can maximise our equity after we have added value.

    Thanks again

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