90% LVR on PPOR?

[kals]

Hi all,
Im keen to understand what's a generally accepted position on LVR for PPORs. I have 2 IPs both at 90% and really want to go for #3 but given the current market conditions neither have enough equity to use for the next purchase. My mortgage broker has suggested increasing my LOC on my PPOR to 90% so that I can tap that money to go again.
Would love to know your thoughts.
thanks

 

[investor2009]

Are you prepared to go through Suncorp?
If so then yes, on Principal and Interst. Interest only only acceptable below 90%

 

[Melbournian]

Hi all,
Im keen to understand what's a generally accepted position on LVR for PPORs. I have 2 IPs both at 90% and really want to go for #3 but given the current market conditions neither have enough equity to use for the next purchase. My mortgage broker has suggested increasing my LOC on my PPOR to 90% so that I can tap that money to go again.
Would love to know your thoughts.
thanks

quite risky man. you take it easy and bring it down a bit.

 

[Rolf Latham]

Much depends on the overall risk profile

90 % LVR on property on its own says ZERO

ta
rolf

 

[Mick C]

Hi all,
Im keen to understand what's a generally accepted position on LVR for PPORs. I have 2 IPs both at 90% and really want to go for #3 but given the current market conditions neither have enough equity to use for the next purchase. My mortgage broker has suggested increasing my LOC on my PPOR to 90% so that I can tap that money to go again.
Would love to know your thoughts.
thanks

some banks would do 90% ..some would cap as well.

But if you had to increase the loan to 90% for equity, why not do it on your IP?? the LMI then can be claimed via tax...

Regards
Michael

 

[Aaron_C]

I think it's always better to keep your PPOR debt as low as possible for the same reasons that Michael has indicated.

 

[Terryw]

I think it may still be possible to claim the LMI if the loan was increased for the purpose of investment even if the security is a PPOR.

 

[Mick C]

I think it may still be possible to claim the LMI if the loan was increased for the purpose of investment even if the security is a PPOR.

Possible, but OP advise the LOC on the PPOR is to be increased...suggesting the loan is for the PPOR.

Regards
Michael

 

[Terryw]

Possible, but OP advise the LOC on the PPOR is to be increased...suggesting the loan is for the PPOR.

Regards
Michael

The LOC could be set up for an investment purpose. However, even if increasing the PPOR LOC the LMI may still be deductible if the increase is for investment.

BTW, this would be a terrible way to do things - never increase a PPOR loan for investment without doing a separate split. Also, not a good idea to use a LOC for a main loan.

 

[kals]

Thanks everyone for your feedback.

Rolf: what do you mean by "90 % LVR on property on its own says ZERO"?


Mick C: My IPs are already at 90%, with LMI


Terry: Interesting point about claiming the LMI, I hadnt thought of that so will definitely ask. I have split my loan, the LOC is purely for investment and i have a separate loan for the remaining debt on the house.

The LOC is already set up for investing and Im assuming it would remain the same if I was to extend it.

Still interested in your thoughts about whether this is a good idea or not. Obviously everyone's situation is different, i'd just like a sense of whether this is a regular practice or not?

 

[Rolf Latham]

Rolf: what do you mean by "90 % LVR on property on its own says ZERO"?

Exactly that


The notional Lvr on a property or a portfolio of properties is but one of at least a dozen issues that influence risk profile.

We enourage many of our clients to go TO 90 % lvr to manage risk, even where they can "carry" 80...............it allows them to hold back considerable buffer that they may not otherwise have.

Now if you are telling me that if one has 5 IPS, one job, a high level of neg gearing, 10 k buffer and we are at 90 % lvr looking to go again, then thats a different risk proposition altogether

t
arolf


ta
rolf

 

[kals]

Thanks Rolf - makes complete sense!