I am going to buy my first IP. I don't have a PPOR. Would I get a higher loan amount (more borrowing power/serviceability) if I capitalised the interest. Do I need a second (existing) property in order to capitalise interest or can I do it with just one property. And how? Is it by getting an IP loan with a sub-account/LOC? Or how would the structure look?
I'm looking to maximise my borrowing capacity and buy a higher priced property if possible.
If a bank/lender would lend me $300,000, how much more do you think I could borrow if I capitalised the interest instead of just the usual paying of interest on an IO loan?
And does the lender take into account that you would be capitalising interest when working out your borrowing capacity.
I'm thinking of capitalising the shortfall between rent and outgoings, or perhaps even capitalise all the interest if that helps with borrowing capacity.
Thanks
I'm looking to maximise my borrowing capacity and buy a higher priced property if possible.
If a bank/lender would lend me $300,000, how much more do you think I could borrow if I capitalised the interest instead of just the usual paying of interest on an IO loan?
And does the lender take into account that you would be capitalising interest when working out your borrowing capacity.
I'm thinking of capitalising the shortfall between rent and outgoings, or perhaps even capitalise all the interest if that helps with borrowing capacity.
Thanks