I have recently moved back to Australia, and purchased my first investment property in Oz. For the moment, it is my PPoR as I was elegible for the FHB Grant as it was my first property here. I need to make some improvements, so Im happy with occupying the place for 6 months. Long term tho, this is strictly an investment that I will rent out.
Ive been advised to get a LOC to “greatly” reduce the Interest. Currently I have a P&I loan with the National . There is only 115,000 owing on this loan as Ive been pretty aggressive with my repayments.
One year on, and Im ready to move onto a second IP here, using the built up equity. My strategy is Buy Reno Hold. All my future IPs will be purchased on Interest Only loans as I am shooting for Capital Growth.
My current Interest rate on this P&I loan is 7.57% base Variable. A National Aus Bank LOC would be 8.22%. (unless I can talk it down)
Do any of you think that a line of credit is a good thing for this property? Ive been advised that it is, but Im wondering what your thoughts are as fellow investors?
BTW – I am discipilined with my finances, so a LOC would be strictly controlled.
Thansk in advance for your comments….[strum]
Try the St.George Portfolio LOC. Good product. I’ve had it for a few years now.
My deal is 1/2 % under stand.var loan for the life of the loan.
Current stand.var is 8.07%.
I pay 7.57%.
I think that is about the going rate around the traps.
From experience I’ve found that the cheaper the loan is, the more restrictive it is. You seem to get what you pay for.Cheers,
Marc.
[email protected]NAB would have to be one of the most uncompetitive lenders going around and trying to squeeze an interest discount is like getting blood from a stone.
SGB have a good range of products although charge at every street corner. They charge a full application fee on their LOC even under their Pro Pack although a discount of upto 0.8% is available.
Why not look at setting up a LOC sitting behind your home loan to access your 20% deposits and then look at taking the new 80% interest only loan on a standalone basis on each property.
Ensure that the loans aren’t X collaralised.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
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