Debt Serviceability

[SOP]

Hi,

I have been lurking around here for a few years now and love the forum.

I have a question regarding debt serviceability and the different ways the banks calculate it.

My situation is that I am looking to refinance my properties to a LVR of 80% and would love to know which bank is the best for calculating debt serviceability.

Thanks.

SOP

 

[Ms Jade]

You will find that there is no 1 answer for everyone. Some banks consider neg gearing, some don't, some take 70% of rent & i believe some may even take 100% into account. Then there is the question of what structure you're buying in, what the security property will be, etc. If it sounds confusing - I agree. Contact one of the brokers on this forum to assess your particular circumstances.

 

[tobe]

Welcome.

Each lender has a diferent calculator which will give a diferent answer for each scenario.

For instance xyz bank is great for mums and dads cause they include Family tax benifit a & b. ABC bank takes 80% of rental into account for investors whereas DEF bank only takes 75% of the rental.

ABC's calculator has an interest buffer of 1%, XYZ's interest buffer is 1% except where the clients eligible for an interest rate discount based on their borrowing level etc.

Ad infinitem. This is why we need brokers.

 

[Peter_Tersteeg]

My general experience is some lenders will give you more money than is prudent to borrow, especially if you don't have a lot of things like tax deductions from existing properties. If you're concerned about how much banks will lend, you should probably start by figuring out your own cashflow situation, determining what your surplus is, and using that to determine what you believe you can afford.

If you're comfortable with this, then contact a broker to help you meet these objectives.

 

[Rolf Latham]

Hiya

Assuming u are looking to buy another property, id Id look for the lender not with the best service model, but the one where you comfortably get across the line.

This may leave the higher serviceability lenders for LATER use rather than sucking up the exposure with existing lending.

This can require a little finesse which a branch lender obviously cant offer.

If you arent looking for any more lending after this lot, then id still choose a mid range lender, just for insurance

ta
rolf