I'd like to pass this by some wise/experienced SSers. I'll be buying my first IP before the year is out and want to explore this scenario in terms of how it might affect my borrowing capacity.
Current situation:
- PPOR loan fixed for another 12 years 8.09% (I know, I know)
- Current loan balance $243k ($20k interest a year)
- Also have an equity loan for $60k, full balance in offset currently (overall LVR 87%)
Scenario:
- Break fixed loan*. Fee makes new PPOR loan balance $271k. LVR 93% as a result.
- Fix loan ~5% for ~5 years
Ok. Where's my borrowing capacity at now? I'm saving $6.5k on interest, but LVR is 93%.
If more info is needed, I'm happy to provide it. And if any brokers want to chat, feel free.
* I'll consider moving out of my PPOR (thus turning it into an IP) prior to breaking if I can claim enough of that $28k for it to be worthwhile.
Current situation:
- PPOR loan fixed for another 12 years 8.09% (I know, I know)
- Current loan balance $243k ($20k interest a year)
- Also have an equity loan for $60k, full balance in offset currently (overall LVR 87%)
Scenario:
- Break fixed loan*. Fee makes new PPOR loan balance $271k. LVR 93% as a result.
- Fix loan ~5% for ~5 years
Ok. Where's my borrowing capacity at now? I'm saving $6.5k on interest, but LVR is 93%.
If more info is needed, I'm happy to provide it. And if any brokers want to chat, feel free.
* I'll consider moving out of my PPOR (thus turning it into an IP) prior to breaking if I can claim enough of that $28k for it to be worthwhile.