Hi,
I currently bank with St George, and looking for a better loan as we originally purchased a PPOR on a No Deposit loan due to circumstance. Everything has changed now so need to change my structure
Previous
Dual "Middle" class Sydney income
no cash in bank
Purchased property/house in Sydney's westCurrent
Income increased significally
$60,000 in cash
PPOR Property has now become an investment property as we have moved interstate into parents home for 12 months while they are away.
$422,000 owed on property. Property valud $470-480k
Rental income $390/week
Loan setup as P+I with an 100% offset
Rate is 7.35%
The loan also has monthly charges of $12/month for offset/admin etcGoing Forward
Need to change loan to IO
To finance to another bank, then SGB (St George Bank) break charge is $6000 until April 2008. At the moment I can move to a different SGB loan product with the break cost being limited to a few hundred $$ depending on daily market.I was looking at this product as it has no monthly fees, plus moves me to IO. Then thinking beyond this transaction is that I can use the LOC style loan to purchase additional properties in very near future.
SGB Portfolio/LOC product –
http://www.stgeorge.com.au/mortgage/home_loans/stgeorge_home_loans/portfolio_loan.asp?orc=personalOR – should I just change my current SGB loan to IO on same mortgage product. Then once I have sufficient deposit to take out a 2nd loan from different lender to buy 2nd, 3rd ….etc property and move the SGB over to new lender after April 2008?
Thanks, hope I have enough info included for anyone to make an informed opinion
Any info would be appreciated
Thanks
JasonGood on you for the higher income and improved situation. Based on what you have said, I think your second option if you can change makes most sense – change to I/O on existing loan and leave as is. You are on a good rate, and this is then set up nice and flexible for the future – your needs may change. But as you have obviously researched, for a PPOR that 'may become' an IP in future, this is a great way to set it up, using the offset mortgage account along with IO. An LOC is generally used when you want to access funds from your own home, to access equity (for personal or investment usage – which need to be kept seperate too! – in which case I woud suggest a split loan) A $6k break charge woudl take years to recover in any cheaper interest rate you may be able to get at this point for a loan like this! Put your funds towards a new seperate loan for your next property, bearing in mind it makes sense not to have your eggs in one basket with finance/lenders (tsk, what would my lender say!)
All the best!
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