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forgot to post this. Cannex has done a review of the product http://www.cannex.com.au/images/Cannex%20View.pdf

oh, yes much worst in that light :eek:

Here's another one from The Australian: http://www.theaustralian.news.com.au/story/0,20867,21433805-5001942,00.html I found this bit of information interesting: I didn't know the standard loan had to be with Adelaide Bank. Wow Greenway Capital with a 50% EFM? and 35% of CG? Thats much...

It'll be interesting to read the Cannex review of it which should be release next week according to that article.

article from re.com published on The Weekend Australian: Innovative mortgages offer greater flexibility, but do your sums

good question, i didn't find anything on their FAQ page. Something to ask about.

Sorry folks I made a huge calculation mistake, when calculating the remaining equity I took away the original standard loan from the new loan but didn't reduce the original standard loan by the principal amount that was paid over 3 yrs. The proper calculation should be: For a 450K property...

Mark, no CG means you are getting 20% of the value loan interest free and paying nothing in return i.e. 40% of 0% CG = 0. This is good for the buy and hold type, keep the loan for the years you see no movement in CG then refinance when CG starts to rise. Might be of use for the CF+ property...

Yup, as I said its highly risky if you are using it as an investment. It would only work in a flat market where you don't see much CG.

Mark, I've just recently refinance my parents home to 90% so its quite possible.

The calculation below is just my understanding of the product so you will want to verify it with your MB. Yes, your equity gained after 3 years of 6% p.a compounding is 536-450 = 86. Of which you must pay 40% to the lender = 34.4. You must also pay back the original 20% that they lend you =...

Hi Imagine, I've already replied to your post, just read some of the previous post. Your captial gain calculation is off if you are using a 6% p.a over 3 years. Also, your post has not been deleted it is still on this page in fact...

Yes, took that into account when I worked out the cost. I used 68.8K for EFM interest and 88.5K for the normal way. Basically the tax difference is about 7K and other difference is the 20K interest. I still think its mostly for those that want a PPOR and don't care about paying a bit more...

Hi Patricia, Your calculation for CG seems to be wrong. 6%pa compounding is yr1: 477K yr2: 506K yr3: 536K CG: 536K - 450K = 86K Equity partner 40% of CG = 34.4K Your 60% CG = 51.6K Your taxable income = 80K + (51.6K * 0.5) = 105.8K Tax payable using 2007 rates (including medicare levy) =...

Fully appreciate it Mark. I too do not want to go in blinded so am trying to extract as much information as I can from different points of view before deciding.

Thanks Mark, I will definitely check with the banks. This was an interesting point brought up before but if Rismark goes under doesn't another party take over? Just as if a mortgage lender goes under another would take over its client? If lender goes under it doesn't mean that all their...

Its a loan that you don't make any repayments and not included in serviceability i.e. you are only paying interest on 68% of the value of the home so I would consider the LVR 68% until such a time that you sell or refinance. I guess this is our contention here. My understanding is the bank...

Hi Mark, you included FHOG into your calculation when you did that 68% I didn't for simplistic purposes. Richard has confirmed that FHOG is available with EFM, if I took that into account to then PPOR would be down to 68% on a 100K home.

I think we're a bit confused here Mark. The serviceability test is on 75% not 95%, the 20% EFM is not taken in account. At least that is my understanding. But it isn't. You put 5% deposit towards PPOR, EFM puts 20% towards PPOR in total you are at 75% PPOR non-deductible. The 20% you save...

Hi Mark, I understand your reasoning but the point I was trying to make was the 20% you got from EFM is interest free and not included in your serviceability test. If instead you pay your own 20% and you redraw that 20% you pay interest on the redraw and your serviceability is less now.