A quick question - I currently hold 2 loans - 1 with NAB and 1 with ING. NAB are offering some enticement on rates if I move all debt to them - my question is whether there is any way to do this without cross collateralising? NAB broker seems to think this is possible but I would've though that if they hold all of my debt (both properties) then whichever way you look at it I am cross collateralised? Any advice would be much appreciated : )
Quick x-coll question...
- Thread starter Stark100
- Start date
It's easy enough to set up two loans without cross-collateralising them with a single lender. You just need to ensure that each loan is only secured by a single property.
When you've got more than one property with a single lender, there is an implied association, but it's a far cry from how the loans can be treated if they actually are cross collateralised.
When you've got more than one property with a single lender, there is an implied association, but it's a far cry from how the loans can be treated if they actually are cross collateralised.
proba not xcolled
whats the rate dfferential overall ?
Often not worth the hassle
ta
rolf
whats the rate dfferential overall ?
Often not worth the hassle
ta
rolf
Thanks all. Current rate for ING is 6.62% variable on approx $500k, NAB is 6.44% (0.8% off SVR) variable on $600k. NAB offering additional 0.05% (!) off SVR so rate of 6.39% variable across both loans, or 6.85% for 3 year fix (ING is 6.99%) which I'm seriously considering. Probably not worth the hassle....?
is eother loan for PPOR or do u stilk have other PPOR debt ?
ta
rolf
ta
rolf
What about "all onies owing" clauses?
That is what I'm talking about. If you default on a loan, potentially the lender can access all other assets held by them.
However, 'all monies' and 'cross-collateralisation' are treated very differently when you're doing things like buying or selling, increasing, restructuring, refinancing, etc.
As an example given to my by AMP last Monday:
IP 1 has a loan of $240k. A few years later you purchase IP 2 and you cross collateralise it with a loan of only $50k.
Some time later, you sell IP 2 and you get $270k for it. The bank reserves the right to determine which loan is paid out by the sale of the property and can happily choose to pay out the $240k loan.
Too bad if you needed $200k for the next project, you've now got to go through a full loan application to access your equity in IP 1.
Interestingly enough went back to the NAB and said that due to DEF fees on ING loan wouldn't make sense for me to refinance now but will go back to them in 6 months time and would they still consider giving me a lower rate as a goodwill gesture and they agreed! So am going to fix for 3 years at 6.85% -not much off the 6.95% that I would have been on otherwise but every little helps and I guess it demonstrates that it never hurts to ask 
Sorry badly worded – what I meant was I said I’d consider a refi with NAB in 6 months time but would they consider giving me the lower rate now – i.e. they said they could offer a 3 year fix of 6.85% (vs. 6.95%) if I took all my debt across, but even though I am not going to do that they have still agreed to give me the 6.85% rate (which I have taken up).
Hiya
On those numbers and making some basic assumptions, you could be better served looking at a properly put together debt recycle strategy which would be worth a bus load more than a few pts of rate
ta
rolf
On those numbers and making some basic assumptions, you could be better served looking at a properly put together debt recycle strategy which would be worth a bus load more than a few pts of rate
ta
rolf
