I am trying to figure out my options and their implications:
Currently
Existing LoC: $275K
Borrowing capacity (same bank): $635K (if I wanted to borrow from the same bank but I won't do that)
I am building my first IP in Brisbane so the loan will be $350K. My bank is not aware about this loan. I am planning to build my portfolio, most likely as a combination of CF+ IPs and some for CG (no more H&L packages ). The serviceability level is okay.
Option 1
Top up the LoC to the maximum ($675K)
This reduces my borrowing capacity (HL limit) to $243K
Option 2
Top up the LoC to $400K for example
This will reduce my borrowing capacity (HL limit) from the existing level of $635K, but not as much as in Option 1 ($243K)
On one hand it seems like a good idea to have access to $600K+ any time. However I am concerned that I may not be able to get a loan for other IPs.
What are the implications from taking option 1, 2 or leaving things as they are? What would you do and what strategy would you apply ? Would greatly appreciate your opinion
Currently
Existing LoC: $275K
Borrowing capacity (same bank): $635K (if I wanted to borrow from the same bank but I won't do that)
I am building my first IP in Brisbane so the loan will be $350K. My bank is not aware about this loan. I am planning to build my portfolio, most likely as a combination of CF+ IPs and some for CG (no more H&L packages ). The serviceability level is okay.
Option 1
Top up the LoC to the maximum ($675K)
This reduces my borrowing capacity (HL limit) to $243K
Option 2
Top up the LoC to $400K for example
This will reduce my borrowing capacity (HL limit) from the existing level of $635K, but not as much as in Option 1 ($243K)
On one hand it seems like a good idea to have access to $600K+ any time. However I am concerned that I may not be able to get a loan for other IPs.
What are the implications from taking option 1, 2 or leaving things as they are? What would you do and what strategy would you apply ? Would greatly appreciate your opinion