Richard, I haven’t used NAB Broker for a while but the way I read their policy, the external debt is still assessed the same as before, and it’s only proposed new borrowings that are affected by the new servicing calculation based on remaining P&I term (confusing I know). The new serviceability calculator still adds a loading of 28% to existing…[Read more]

Richard, I haven’t used NAB Broker for a while but the way I read their policy, the external debt is still assessed the same as before, and it’s only proposed new borrowings that are affected by the new servicing calculation based on remaining P&I term. The new serviceability calculator still adds a loading of 28% to existing debt so it seems it…[Read more]

That is true, but those debts would need to be disclosed which reduces your borrowing capacity by a greater amount than borrowing it against another property. And the interest charged on those borrowings might actually mean that LMI could come out cheaper in the long run.

Cheers

Tom

Interesting. ANZ and NAB have said that they are no longer offering discretionary pricing, but CBA and Westpac have “reduced” their investor discounts which seems to suggest they are still offering them in some format.

I just had extra discount approved for a Westpac investor deal, albeit being to renew a pricing discretion that had expired a…[Read more]

Correct, when they’re suggesting property for you, you can be assured they will be receiving a commission for it that is added in the price. The effect that will most likely have is your valuation may tank.

Cheers

Tom

Horses for courses. An online lender may work well for you, it may not.

Until you delve more into your personal scenario and go through your goals, you really won’t be able to tell.

Cheers

Tom

Yes, the higher the interest, the higher the deductions against the income of the owners on title.

IP should definitely be all I/O, especially as you’re thinking of a PPOR down the track.

Fixed can be good if you’re looking at a set and forget type loan, or for when cashflow might be a bit tight and you would like to know your repayments for…[Read more]

Hi Borna,

As Richard suggests, you will have some extra costs involved with a high LVR purchase for an IP, however they are normally tax deductible .

With the plan you are suggesting, it can be most beneficial to have as minimal a deposit on your first IP as your risk profile allows. Coupled with the right structure it will allow you to maximise…[Read more]

Not really the case. Total aggregated lending will likewise get you better rates, even if it’s multiple splits.

As for the OP, take heed of Terry’s advice. It’s spot on.

Cheers

Tom

You should have received a quote from the broker upfront advising their fees to you. If not, then what they are doing in charging you contravenes the NCCP Act.

Cheers

Tom

It sounds like you are trying to salary sacrifice the car. This has its own advantages and pitfalls, and you should really see an accountant to make sure it is suitable for you.

As for the borrowing capacity, this all depends on how much your repayments are for the lease? That is dependent on the lease term, interest rate, etc. What that does is…[Read more]

As long as the new loan was to be used towards the new IP purchase then yes, it would be deductible. However as you have different loans everywhere, you need to ensure the whole loan structure is setup correctly if refinancing.

Cheers

Tom

Adam,

If you are still going to live in your PPOR then that LOAN 2 is not going to be deductible. If you made it into an IP then it will.

If you’re looking to buy another IP, what you can try dependent on equity position is take out a loan against either property to fund deposit + costs for new IP. That would be deductible.

If you don’t have…[Read more]

No, do not redraw the $50K whatever you do. As soon as you redraw it, you contaminate the loan at the current moment in time.

There is the option of either you or your wife purchasing the other half of the property from the other (I think what Richard was referring to as an option). Doing this will allow you to increase the loan size and keep the…[Read more]

Richard is right on this. The maximum you can claim on the interest is $185K. The $50K won’t be deductible.

If you really want the $50K in funds, then it would need to be done as a separate split to make things clean.

Cheers

Tom

Generally FHOG isn’t classified as genuine savings by lenders and can’t be contributed towards the 5% deposit.

Have you rented somewhere with an agent for a long term period? Some lenders take this as qualifying for genuine savings and then you can use other funds to come up with the 5%?

Some lenders also do non-gen, savings at 95%LVR, but they…[Read more]

Hi bns, like Jamie I’m not quite understanding the question you have posed, however he is correct in saying that if you are looking to pull equity out of the existing property for the new PPOR purchase then it wont be deductible as the purpose of the loan will determine deductibility, not the security it is based against.

The loan structure from…[Read more]

Wow, if that is the advice the branch manager is giving, then I dare say he won’t be branch manager long.

Though I’m not surprised as bad advice like that is prevalent from both banking staff and/or brokers. Just need to weed the bad ones out when looking for a good one.

Good to hear you set them straight Solomon.

Cheers

Tom

Agree with the others.

With the figures you have given, you have about $130K to play with in equity with your current property (before incurring LMI). However structuring this equity release is critical to give yourself the maximum deduction possible come tax time.

This is where a decent broker can be a enormous benefit.

Cheers

Tom

As others have mentioned, unfortunately the equity you pull out for a PPOR wont be deductible as purpose of the loan determines deductibility, not the security it’s based against.

You need to make sure the existing $250K loan and $100K equity loan are separate loans and not one mixed one otherwise that will create a mess. Also the IO as others…[Read more]