need a new loan for another IP

It could be one of those situations where you may only receive a small discount by bringing that extra 180K over or the 900K it may not be worth any fees involved or your time to break up other mortgages etc.

I should have also mentioned. Leave the challenger loan as is – breaking the fixed period won't make financial sense and taking it over to CBA prob won't make much of a difference in terms of the rate discount you organise.

Cheers

Jamie

AJ hate to say i dont think you will have any success with NAB wanting to go to 1% discount.

They will wheel out the line that they have the lowest standard variable rate and cant do much better than that.

In regards to CBA as Jamie has pointed out 1% is par for the course however they will want to X collaterlise all 3 loans which in the current climate is certainly not a recommended strategy.

Under the CBA package you will have an Annual fee but you could probably get close to 6.5% without any fee from a standalone lender without the need to X the loans.

Why not just get the CBA to finance the 20% deposit and acqusition costs as an Equity Loan and then finance the 80% purchase price elsewhere. There is more to correctly structuring an investment portfolio than getting the cheapest interest rate for a few months. 

Just make sure the NAB johhny doesnt suggest an application and a credit search otherwise you will have further issues.

Cheers

Yours in Finance

Hi AJ

Yes the documentation will show both securities under each loan.

Why would you look to fund the 20% deposit yourself and not use gearing when you have a PPOR debt.
Structuring it correctly will give you the best of both worlds / maximising your Tax deductions as well reduce the interest on your non deductible debt. 

If the deal is Credit scored (and most new loans are) and the NAB have done a Credit search this could affect your chances of securing new funding. Why would a lender need to do a Credit Search when they are merely quoting you a rate of interest other than to try and push you towards their product.

Cheers

Yours in Finance

Slightly off the topic I had NAB sales rep call me to see if they were meeting my needs and they gave me the token line of NAB has the lowest standard variable.

Who is on a standard variable though lol most packages are a discounted non standard variable rate. It seems like a big marketing stunt. I have some loans with CBA and they are beating the NAB on my package by about .03. Which granted isn’t much but the Standard Variable means jack to me.

Adding to this I had a Suncorp rep ring me a few days later. First time ever this has ever happened to me…. Talk about trying to bring in more bussiness.

Hi Aj

Ok that makes a little more sense.

When you said you were looking at purchasing an IP i assumed that the interest would be Tax deductible.

In answer to your question Yes NAB credit scores all of its deals and that can be a good and a bad thing depending on a few things.

In saying all of this i still think there is a few things i would look at doing to get your house in order prior to lodging an application.

What happens if you decide to rent the property out after all and have used your own savings as deposit bit late to worry about loosing potential Tax deductions. Personally if in doubt play safe and go 100% finance with 100% offset account.

Cheers

Yours in Finance

On a separate issue anyone get the contact details of the 101 posts this morning for Ugg boots and ski equipment.
Moderators did such a good job of cleaning the the site up i missed on out the details and might be needing a pair shortly lol.

Hi AJ,

The biggest issue with putting all your loans with one lender/bank is that even if you have all three properties in different loans (not crossing the properties) most banks have an all Monies clause. This means that if for any reason you default on one mortgage the bank can collect the outstanding balance from the other loans. (this can also include even your savings account if you had this with CBA as well) more information on this clause below http://www.lawlink.nsw.gov.au/lawlink/lrc/ll_lrc.nsf/pages/LRC_r107chp08

My suggestion would be to Increase one of your other loans (setting up a new split so your accountant can easily work out how much of the interest paid is for investment purposes, also you can claim the cost of a new investment property purchase over 5 years on your taxes). To keep in simple I would increase your existing investment property, on the variable split. This will save you the cost of the DEF’s and or break cost. (if you are looking a discharging this loan, check how long it will take you to make the cost up, ie is the saving on interest rate out weigh the cost).

To make sure that your owner occupied property is always keeped save in case of any lost on the investment properties (although we not plan for this things happen and you may have issues with renting or tenant issues or rates increase more than expected) I would put at least this property with a lender different to the 2 investment properties. Due to all monies clause listed above.

ING Direct have etreamly cheap fixed rates that comes with an offset account (offset account will allow you to add and redraw money during the fixed term). 3 years fixed rates are currently at 6.19% and I believe are reducing shortly.

My advice is if you can save on mortgage insurance do so, you have enough equity in your properties not to have to pay this so why do it.
Sounds like you have put yourself In a good financial position and i dont see why you would want to add mortgage insurance to your debt when it can cost up to 3% of the loan amount.

Once you have the new investment property, I would suggest that you focus on reduceing all person debt (owner occupied property, credit cards ect) as possible. This will not only free up cash follow but will also only leave you with good debt (debt that can be used to reduce the amount of tax you pay, better in your pocket then the Governments)

I hope this helps, best of luck