Re financing due to changed circumstances

Hi, hope you can help me.
Have an IP and my PPOR will become IP in Dec.
IP is I/O loan 100k comm, 256k Adelaide
PPOR is P&I. 110k comm
I am refinancing to change all to I/O. Mort broker has given me 3 options combining all debt into one bank?

Loan amount would be 490,868k
Macquarie 4.89%, comm 5.05, P&N 4.85

Is it ok to hav all the debt with 1 bank? Any better offers out there at the moment?
 
Ok to have all debt with one lender. Once your lending hits the million mark or you have more than 5 properties (which ever occurs first) then I would start thinking of diversifying lenders.

The broker is clearly benefiting from the refinance but whats in it for you?

Which lender have they recommended and why that specific lender? How does that lender fit in with longer term plan?
 
Having multiple loans with one lender isn't necessarily a problem when it's early in the acquisition phase, so long as you keep under certain limits for LMI exposed loans and take into account centralisation risk from all loans being with one lender.

Macquarie is a relatively high serviceability lender, which is one of their major niches - if you are looking at growing your portfolio moving forward, it may be more beneficial saving this ace as a draw card for when they are truly needed.

Just some food for thought.
 
Thanks CJ & finance shop.

My thoughts are to use the excess money from the rental yield to increase my share portfolio for the next few years before purchasing a third property. I'm nearly 55 and feel I need to spread my risk.
Mortgage broker is leaning toward Macquarie @ 4.89% line of credit home loan. This rate is lower than I have been paying at com bank & Adelaide so my costs should be lower.
 
That's actually one of Macquarie's niches where you can set up a margin lending split from the loan.

Only thing so consider is the age side of things. This may be an issue when it comes to future lending. All lenders will have an age policy whereby you need to demonstrate an exit strategy.

A lender like Westpac has a no age policy when it comes to investment lending.
 
Thanks CJ & finance shop.

My thoughts are to use the excess money from the rental yield to increase my share portfolio for the next few years before purchasing a third property. I'm nearly 55 and feel I need to spread my risk.
Mortgage broker is leaning toward Macquarie @ 4.89% line of credit home loan. This rate is lower than I have been paying at com bank & Adelaide so my costs should be lower.

I think it is ok to have a few loans with the one lender.

However I wouldn't suggest a LOC loan. There is no offset so you would have pay all wages into the loan or park your money elsewhere. This is ok if it is a main residence and will never become an investment ever. if it did become an investment little to no interest would be deductible.

Investments could be a LOC just do not place any excess funds in them such as rent.

Using excess rents to invest is not a good idea while you have non deductible debt. i would take this opportunity to set up another LOC split to invest and to put the money you would have used off your home loan.

Also suncorp would have a much lower rate. Macquarie is good though, but lower rate is better.

if using macquarie make sure they are put in on separate applications so they will not cross collaterlise the loans.
 
Hi Terry

The principle & interest is only another $600 p/mth, would you suggest heading in this direction rather than interest only?
 
Hi Terry

The principle & interest is only another $600 p/mth, would you suggest heading in this direction rather than interest only?

Is this for the PPOR portion? If you intend to stay there then paying it off will be good. But if you were to later move out and rent it you would have less tax deductions - $100,000 x 5% = $5000 in interest = about $2000 lost per year in tax savings.
 
Hi Terry, I'm moving out Dec so current PPOR will become an IP = 2IPs. This is why I'm refinancing. I'll be moving into my partners house.
 
Cost of offset account added later?

Hi I've just refinanced my 2 Ips with Macquarie. Two I/O loans, one for each house. In discussions with mortgage broker, I asked for a LOC account where rents will be deposited and from where direct debits for both mortgages can be drawn from. As the properties will be slightly +, I discussed the need for an offset account to park any excess funds.
Today when I went to sign the loan contracts no offset had been set up. The broker said he can't remember our discussion & I've asked him to rectify. Unfortunately I'm going overseas next week for 5 wks & broker says can't rectify til I return as it will hold up the contracts which need to settle prior to my trip. Two questions
1/am I setting up my accounts in a logical & best way?
2/ will it cost me extra when I return to set up offset acc?
Thanx in advance.:eek:
 
With Macquarie you can't have an offset on the LOC loan. I wouldn't recommend a LOC like you are suggesting either. You could save more money by using an IO loan with an offset - on any no deductible debt.

But since you are going to settle soon it may be better to leave things as is now and do a variation latter.
 
Okay Terry thanks for the info. I'll be happy to sort this out on my return from my trip as there's not enough time now. The line of credit is a separate loan of 20k and I was thinking of using it as a slush fund from where the rent goes in and loan repayments come out of. Any excess I was going to put into the offset? Both loans are deductible as IPs.
 
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