JIT, not sure if you're asking only about crossing v maintain separate securities or whether you're also asking about advantage of keeping all properties with one lender.
With regard to the first I'm pretty sure you know what the consensus is. Cross collateralising will give the bank more power to look at your whole portfolio etc so don't do it if you don't have to.
With regard to the second, you'll be in a better position to negotiate a better discount off SVR but greater % exposure with one bank = greater risk.
Hmm... Just re-read your q & I think you are asking only about the former. If crossed and you get into trouble or the bank wants to limit exposure, the bank can sell whatever property it likes, not the one you happen to be behind in. In this scenario the potential downside is greater than separate properties. Also limits your flexibility maybe if you want to sell one property & all thye securities are bundled as one. I wouldn't be surprised if you read the 'portfolio' docs whether it may not function as a cross-collaterised obligation anyway through the function of an "all monies" clause but that's just speculation on my part. I'm sure the brokers can give you a much better answer.
Ms Jade,
Actually the plan here was to have all loans with one lender in order to get the maximum rate discount, and then a further rate discount based on the overall portfolio LVR being <80%, for this particular lender.
But... by doing this without formally x-colling the portfolio, and assessing the overall interest rate applied according to the overall portfolio LVR.
Hence... the loans are assessed on a ''portfolio basis'' so to speak.
Each loan would still be secured by one property, with no ''bundling'' of loans and securities.
I'm sure there's an all monies clause (and some other clause) in there which would let the bank do whatever it wants if it needs to, regardless.
Also, I think that when looking to retire (off property investments for example) off an arbitrage on net rent and interest expense, then getting the lowest interest rate possible is critical... it's clearly your biggest expense.
eg. 3% net on $2M = 60kpa +ve CF, vs. 2% net on $2M = $40k +ve CF, so maybe the difference between being fully retired on a modest income, vs. being semi-retired on a lesser income.
If the bank is not playing ball for some reason, then you take the whole lot to another lender in one go (or at least threaten to)...