Using Equity in my PPOR to purchase my 1st IP

If your PPOR is worth $450K you could borrow up to 80%=$360K.  Less $330K owing, you would have $30K available equity, which you could take out as a line of credit (and then you only pay interest on what you actually use).  That is assuming the bank values your PPOR at $450K.  I have found the bank often seems to undervalue houses, so you might not have that much after all.

Plan sounds good though.

line of credit (LOC) loan is where bank gives you a loan with a maximum limit (using home equity as security) then you can draw on it for whatever you want (incl world trip or car etc).  Advantage is it is very flexible because effectively it gives you that money "at call" once bank has approved and set it up.  For an investment property you use it to cover 20% deposit plus costs. (Then borrow the other 80% against the IP.

 Type in "line of credit" into google and you will find every bank offers it in some form or another.  Interest rate is usually a little bit more than standard variable rate. (eg 0.2% more)

Where will it be used?  Up to you, you're the spender!

PS I am not an expert, but I do have a few LOC loans on the go for different things.

Hi new

Easiest way to structure the loan is to look at taking a separate loan secured against your PPOR to either 80% or 90% of the current valuation and then using these funds as deposit on the land,

Separately take out a standalone loan secured against the land and on going construction.

Consider using a separate lender to avoid cross collateralising the securities.

Heh Steve

30 Posts and 21 of them refer to a referral to a Mortgage Broker and Property investment services.

Not bad mate what cut do you get on each sale or are you the owner ?

Perhaps contribute for a year or two first before you sell your services.