Thanks Peter,
I am not sure what you mean by "LORD" calculation. I have the IPs in a crossed loan and the PPOR with an offset.
LE
Auto correct on my phone. I mean to say LVR.
Yeah. Low valuations and variable interest rate of 5.38. I am sure I can do better in this environment. I have been tempted to lock in at 4.59 fixed, however, with rates not going north there might be a possibility of them going south so I am hanging on
LE
5.38% is so terrible it's almost criminal. At a minimum you can do about 0.7% better.
Thanks, I am trying to keep things simple, my accountant fees are high enough. Notwithstanding the above, I might have to get advice.
LE
Working out interest on a non crossed portfolio is easy. You ring the bank, give them each account number and they tell you how much you paid on each loan. It only takes a few seconds and you include this in the expenses for each property which you give to your accountant.
It's one or two extra numbers per property, not an extra process. If they charge you extra for this, either they're charging too much or there's a bunch of other deductions they're ignoring.
Here's the real problem. You've got a cross-collateralised portfolio with BankWest. This is definitely going to get in the way of further investing sooner or later because BankWest is one of the most conservative lenders there is in their affordability calculators.
At some point BankWest will refuse to lend you any more money regardless of how low your LVR is, whilst most lenders would still allow you to borrow more. All of your equity is tied up in BankWest and it's tied in a mess.
Even if you want to purchase through a different lender, BankWest won't allow you to access equity in your portfolio because they'll want to know what you'll use the money for and when they see the purpose, they'll apply their calculators to it and deny the equity to you.
At this point you might want to refinance one property away from BankWest to access the equity. BankWest now knows what you want to use the equity for and they won't release the property you're refinancing because of the same reason they won't release the equity.
The only option you'll be left with is to refinance everything so you have no exposure to BankWest at all. At this point you've been messing around with all this for about 6+ weeks and you've missed out on the property you were planning to buy.
This probably won't happen on the next property and maybe not the property after that, but if you're going to build a large portfolio it will happen. With each property you buy in the meantime, it gets harder, takes longer and is more expensive to fix the problem. If you fix some of your loans it makes it even more expensive and harder again.
If good structuring isn't a compelling argument, consider that you can also do much better cost wise. (Even BankWest can do better than what they're offering you if they're honest about it). The amount it costs you to fix this now will be refunded many times over simply because you'll get a cheaper deal almost anywhere else.