Is there a reason why you are with ANZ? Did you previously pay LMI with them?

You do not need to cross securitise your properties in order to access equity. You just need to set them up as separate. It is more likely that the lender will recommend that you cross securitise your properties (in order to make it harder for you to leave the bank) but tell him/her that you want the properties to be standalone.

Is there a reason you are going 90% because you enough equity to go less. 

Also if you are going into LMI aim for 88% rather than 90%.

Get your broker to order some upfront valuations (different valuers and different ypes of valuations – i.e. kerbside, full valuation and modelled estimates). You may access the equity you need and not need to go to 90% and pay LMI.

Re the equity releases – how you actually do it will somewhat depend on the lender (and their limitations). I would generally go for an standard product with a linked offset and I would do this for each loan account or do it as a redraw as some lenders like ING , Citibank, etc have restrictions in the number of offset each client can have or they charge you for additional offsets (like ANZ).  Lenders like Westpac have unlimited offsets. Most lenders charge a premium for the LOC product and some dont (like Macquarie) so if you were with Macquarie I would set it up as a LOC and then convert it once you have access the funds. 

Dont change it when you convert it – change it now and dont reduce the principle any further. Create the offset and park your principle payments in there.

Different lenders will lend different amounts – $435k still seems very low so I think it hasnt been structured correctly to utilise a higher borrowing capacity. 

If its NAB then you shouldnt have any dramas switching to an IO. 

…..and don't forget to set up the offset.

Which bank is it?

Can't comment on how long you should hold the property but I like to keep property and sell only when I need to money for a better project/opportunity. This is because entry and exit costs associated with property here is quite high. 

Going interest only allows you to have the money liquid in case you get a crappy valuation and cannot access the equity. So even if you are not going to sell it – its still a good strategy to go IO.

Are you not going to convert the unit to an investment property and upgrade within the next 1 or so years?

Ok so let's say you pay your loan down and becomes zero. When you go to convert the property into an IP and you want to negative gear – then the amount that you can negative gear is $0. Whereas if you kept the loan as interest only as did not pay the loan down then you can obivously claim the higher amount when you convert the property to an IP.

Instead of paying the principle down – save the money in the offset. In fact have all your salary go into this account as the bank calculates interest on a daily basis so you want as much of your money physically in the offset account as possible.

The only negative with this strategy is that if you are not disciplined with your funds then you will spend the principle that you have saved in the offset – since the offset is a savings account (i.e can be accessed anytime). 

What's the actual question?

If the loan amount is under $1mil then regardless of LVR ME Bank will accept the COS and will not order a valuation. Quite a handy niche.