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All Topics / Finance / How positively geared commercial investment affects borrowing capacity
My husband and I currently have pre-approval to borrow up to $2 mil. We were looking to purchase our PPR but are now looking at the possibility of purchasing a commercial investment in the meantime ($1 mil value) and PPR in 12 months time.
The commercial investment would provide a net income of circa $55k per annum.
My question is around how the banks view this asset i.e. we’ll effectively consume $1mil of our current borrowing capacity with the investment but given it will be providing a net return of $55k per annum, will that mean the banks allow us to borrow more than the original $2mil or less?
Any insight appreciated!
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