Thanks Richard

Yes I already got my broker to that and the valuer wouldn't budge an inch. What got me most mad about it was not the value itself, but his reasoning behind it. I went as far as to forward a few similar properties that sold in the area recently and he came back with "these properties are not comaprable as they are a minimum 100sqm bigger than the subject property" which isn't true as I verified from the real estate that the 2 of the sold properties were both on 650sqm and my property is 630sqm. Still he won't budge, he is set in his mind and won't listen to logic and it seems there is nothing I can do about it. Thats why I started getting the suspicion about Westpac as I only needed it to be an additional 20k higher to get the loan. But honestly, I don't think they would have instructed to under-value too, I guess it is just a case of bad luck.

Thanks for your advice too imugli, I am starting to think you are right, but am still in 2 minds. Maybe we are just not in a position yet to buy. We have been putting away all our spare money, but it is slow going, and a decent chunk of my spare money goes towards the negatively geared IP. I guess it is also not a good idea to redraw on the IP but is is the only source of equity we have, and I thought that it may be better to buy now at 100% than to wait 2-3 years saving the deposit and throwing more away on rising rent.

Thanks for the reply. Could you recommend any institutions that charge a fee instead of LMI? I haven't heard of any..

Just a little more info, the property I own I still owe 182k which gives me $26,250 ( (245k x 85%) – 182k) or
$38,000 ( (275k x 80%) – 182k) in redraw respectively between Westpac or NAB as in my previous post.

Could anyone recommend what they would do in our situation? Perhaps we are better toughing it out longer in the rental market for now..

Any help appreciated!

Thanks for the help guys, really appreciate it. I will definately be looking closely at changing the loan to be IO.

Simon you are right, my next purchase could be a PPOP, so in that case won't pay down the IPs. However if I was certain that my next purchase was going to be another IP or possibly some shares, would it be in my benefit to reduce the principal on one of the loans to later use as a deposit instead of putting into the savings account?

Thanks again.

Dan.

Hi Lia,

I am looking to improve the structure of my loans so I can purchase another investment proprty in about a year. I have been considering changing my loan of $183,000 that is currently P&I to be IO. I have enquired with Bankwest who the loan is through and it will cost me a $350 one off fee and $12 p/m account fee to have it fixed at 7.99% for 5 years. At the moment it is a variable interest rate at 7.65% currently with no other fees. As it is now an investment property I wonder if this would be a better option and to concentrate on reducing the principal on my loan of $86,000. I have also spoken to another bank who has suggested combining both loans and refinancing with them. Of course I could just leave everything as is as well and avoid any fees if it is not worth refinancing? Any ideas please, open to any suggestions?

Thanks!