I am looking for lenders who will take into account more than 75% of rental income when calculating “serviceability” and offer a reasonable interest rate.
I was just about to buy my fifth cash flow positive property when my lender told me that I had reached my “Serviceability limit”.
My “serviceability” limited had been “reduced” with each new cash flow positive property purchased.
I was surprised because my cash flow had increase with each property purchase. As far as I was concerned my ability to “service” the loans was increasing not decreasing.With further inquires I discovered that my lender, MembersEquity, was only considering 50% of the rental income from my regional (rural) properties and at the same time the interest on the loans was being calculated at 2% above the current market interest rates.
In other words the rental income was being sensitised down by 50% and the loan repayments were being sensitised up by 2%.In another post Stuart Wenyss recommended IMB as a lender who will take 90% of rental income.
Can anyone recommend other lenders, with a cheaper interest rates, who will take into account over 75% of rental income when calculating “serviceability”?Regards,
SweetpHi Sweetp,
Rental Income,
ANZ 75% and 60% for melb,syd inner city apartments,
St George Bank 80% and 60% for melb,syd inner city apartments,Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:0402483216
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
What percentage of rent that banks take into account can be misleading. SOme give with one hand and take with the other. In general I have found Westpac and ING to be pretty generous overall.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Gee… so you want a lender that will lend you the maximum and you want the lowest rates on the market. You’re easy to please… [
]IMB is not too bad. Have you checked their Budget Loan? Upfront fees are high though.
That said, they will lend the most if you have “external” debt (which you do) because they take it at repayment amount and don’t gross it up.
What would you prefer:
1. Low rate but no borrowing capacity; or
2. Average rates and borrowing capacity.Cheers
Stu
Hi
I have been lead to believe that HSBC take into account 100% of rent.
regards
alf.Hi Alf
HSBC Acceptable income,Rental income 100%
companies, Trust 100%
Investments income 75%
Part time/Casual or 2nd job, 1 year continuous 100%
Bonus/Overtime 50%
Regards
StevenMortgage Broker
[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Hi. The last time I looked at HSBC, they would only lend to an LVR of 70% for investment properties. They also are wanting to take a charge over the company (if the borrower is a company). Other than that, their serviceability model is not bad.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
HSBC will lend to 80% LVR for IP & PPR with no LMI
And up to 90% LVR with the borrower paying the LMI insurance premium,
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Thank you for the replies. I will check out HSBC, ING, and IMB.
There are some knowledgable people who read this form.
Thanks again.
Regards,
SweetpA professional property investor ($12m prime Sydney residential portfolio) had hit the brick wall on serviceability, despite under 40% total gearing!
That’s because of the very low returns currently.
We’re working at financing some unencumbered property using 65% LVR, no income declared and no assets & liabilities declared, at approx 6.85%.
Not sure that would help your situation though?
Max Hugen [email protected]
Alpha Financial
Residential & Commercial Loans
http://www.alphafinancial.com.au
02 9560 3061The NAB will accept 100% of rental income if there is a rent agreement in place. Only 60% on proposed rent for a purchase tho’. If you are buying, get a tennant prior to purchase or valuation at least. (The valuer will determine the proposed rent.)
Homeside Lending (a division of the NAB) has same policy as NAB, and can be accessed easily via a broker.IMB – 90%
Adelaide Bank – 80%
AMP Banking – 80%
BankSA / St George – 80%
BankWest – 80%
Citibank – 80%
ING – 80%
Macquarie – 80%
The Rock BS – 80%( – the benefits of using a mortgage broker!)
I would recemmend using a broker, not just because I am one, but because we have fancy software that can take into account different banks interest rate loading on existing loans as well as % of rent used on new finance.
All the best,
Michael O’Brien
Adelaide Mortgage Professionalshey if your in Vic – email me and ill connect you up with a great lender from the CBA – she’s very good with the finance – trust me.
Kind Regards,
George.If You never never ask, you’ll never never know”
Sweetp
Why not give some more details so we can do a servicibility check for you?
Brendon
Acute Mortgage Reductions
‘Better Finance for More Homes Sooner’
[email protected]
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