Serviceability - Employer's stock option

My company has just started offering our employees to salary-sacrifice for stock options.

At this stage, i'm considering whether I should take this offer up.

Since my cashflow is reduced, would this impact on how my bank assesses my serviceability for my next investment loan?
 
My company has just started offering our employees to salary-sacrifice for stock options.

At this stage, i'm considering whether I should take this offer up.

Since my cashflow is reduced, would this impact on how my bank assesses my serviceability for my next investment loan?

Is it voluntary and can it be stopped anytime?

If so, then it shouldn't be an issue.

If your locked in for a fixed period of time, it will impact your serviceability.

Cheers,
Redom
 
If it could be stopped at any time I think it would have little effect. If locked in then it will reduce income going forward which means less to service on.
 
The general rule with most lenders is that if its voluntary and can be stopped by you at anytime then it doesn't affect servicing.

Locked for 6 months is not an issue but they lender may request how you will mitigate the shortfall during the 6 months. Best to be proactive in the explanation instead of have the lender question it.
 
Best to be proactive in the explanation instead of have the lender question it.

Spot on.

A clear explanation of what the deduction is, how long it will go for and how you plan on meeting this liability over the fixed period will help your application.

Having said that - if you are planning on buying property within the next 6 months, have tight borrowing capacity and a low level of savings (I have no idea if this is your situation or not) then perhaps it's best to give the stock options a miss for the moment.

Cheers

Jamie
 
Thanks guys!

The advice posted have indeed been very helpful.

I think at this point in time I'll give it a miss as Jamie pointed out. No biggie. :)
 
My company has just started offering our employees to salary-sacrifice for stock options.

At this stage, i'm considering whether I should take this offer up.

Since my cashflow is reduced, would this impact on how my bank assesses my serviceability for my next investment loan?

Depends who the lender is. Many public companies do this and its a salary sacrifice loan by the employer under FBT rules and not a bank loan hence its unreported. Even bank employees don't have it reported. Its a HR loan rather than a credit loan.
 
Depends who the lender is. Many public companies do this and its a salary sacrifice loan by the employer under FBT rules and not a bank loan hence its unreported. Even bank employees don't have it reported. Its a HR loan rather than a credit loan.

This isn't considered a liability but the payments often turns up on peoples payslips as a deduction, which raises questions. It's not a loan, but it's an unusual payment which lenders do factor into their servicing if it is ongoing. From our point of view, it doesn't matter if there's FBT or not, we need to ask if it's ongoing and mitigate it if it is. The figures on the payslip say it all.

Similarly I don't think you'll find a HECS/HELP debt on your CRAA, but it is another ongoing payment based on how much you earn, so lenders factor it into their serviceability as well. Most people completely forget to disclose this, which makes it something I deliberately look for on payslips.
 
Back
Top