Thanks Terry!

Is there no way for me to setup a company and be the guarantor instead of the borrower once I’ve maxed out? Is the only choice to sell my IPs?

I think you could go for a low doc loan, no doc loan are pretty much non-existent

Do low doc loans still take into account consistent income? I’ve currently reached my borrowing cap by burrowing $650k (the full value of the property) for an IP purchase and I heard it’s possible to purchase more property through low doc loans as long as a 20% deposit is being put down. Is this possible?

Yeah I get that but will the banks view that as a $500k loan total for serviceability? $130k loan for deposit/stamp duty and $370k loan to secure the property? In that case burrowing the full amount being $500k and not putting a deposit down will have no difference on serviceability.

Won’t that drastically increase the monthly repayments though?

What if the deposit is being supplied by an equity home loan? For a $500k property for eg, a home equity loan of $130k is used to settle the deposit, stamp duty and associated closing costs.

Hey Terry,

If you put down a deposit (5/10/20%) for an investment property instead of burrowing the full amount, are lenders more willing to let you burrow more for IP purchases?

Hey Terry,

Thanks for the information. In regard to your last point, what would be the possible ways of extending it?

Hey Terry,

I just wanted to clarify a few things if that’s alright (I talk in a discretionary trust sense)

a) When you say to carefully select the director of the trust, should it be the personal with the highest annual income? What are the other important factors to consider?

b) What do you mean when you say ‘avoid using certain lenders’?

c)…[Read more]

It seems that most banks only provide an offset account if the investment loan securing the property (interest only in my case) is on variable interest and not fixed. Variable interest rate is higher than fixed which increases the monthly repayments and makes this strategy less appealing. Is it possible to have an offset account linked to a fixed…[Read more]

In this case, is there a difference between an equity loan and a term loan? Would an equity loan work as well as term loan in this situation?

Yes so in the example above, I pay down the entire $160k mortgage and then reborrow than same amount via a LOC to invest in stocks. Not sure why you say it wouldn’t make sense to use a LOC. Is it because of the high interest rate? What do you mean when say ‘usually using the same loan’?

What do you mean when you say existing loan? I thought tax deductibility can only be achieved on debt used to secure income producing assets. Can you clarify this?

Hi Mr Taylor,

Thanks for your reply, you were indeed correct! I appreciate the advice.

Cheers,