All Topics / Help Needed! / why should you seperate your owner occupied home loan from IP loan?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of NanNan
    Join Date: 2015
    Post Count: 26

    My broker once told me, it is better to use different banks for your loans, to separate your owner occupied home loan to your investment property loan.

    Do you think it makes sense?

    Profile photo of TheNewGuyTheNewGuy
    Join Date: 2014
    Post Count: 151

    Definitely a yes for separating ppor and ip loans. Depends for separating across banks.

    Profile photo of BennyBenny
    Join Date: 2002
    Post Count: 1,416

    Hi Nan,
    I believe it is a good idea – mainly for asset protection. Imagine if you had a loan for your home for some years and you suddenly wanted to go buy an IP – AND got finance from your current Bank.

    First, they OFTEN set things up so that the two loans are “crossed”. I have found you need to nip that in the bud when first seeking a loan. By using a different bank for the IP loan, this means the loans CAN’T be “crossed”.

    Also, let’s say you did go ahead and borrow from your “bank of many years” for an IP loan too. And suddenly things go badly wrong, and the IP is suddenly not worth what you paid for it, AND your employment gets cut OR your job goes away !!

    Things start getting a bit serious then. Now, with your “Bank of many years” holding both mortgages, there is a chance that they might want you to sell your HOME (as it has a lot more equity than the IP) to repay them for the IP loss. With a separate Bank, that could still happen, but it would likely take a while longer as they don’t have the mortgage on your home.

    Really, I just like the idea that one bank looks after the loan on your home, and another bank(s) can look after the loans on IPs… and never the twain shall meet !! ;)


    Profile photo of NanNan
    Join Date: 2015
    Post Count: 26

    Thank you Benny and the good guy:).

    We just need to separate the personal home loan from investment loans. Is it okay to put all investment properties under one loan? Or for investment properties, it is better to use different banks too?

    Profile photo of Jamie MooreJamie Moore
    Join Date: 2010
    Post Count: 5,069

    You don’t neccesarily have to use different banks – but you should certainly keep the loans uncross collaterised.

    Do to that – you simply set up two loans against your owner occ (one for owner occ purposes and the other for the deposit/costs on your investment(s)

    So if you were purchasing one IP for instance – you’d have three loans set up:

    Loan 1: Current loan
    Loan 2: Equity release for deposit/costs on IP

    Loan 3: IP loan

    All three loans can be with the one bank – or you could have loan 1 and 2 with one bank – and loan 3 with another.



    Jamie Moore | Pass Go Home Loans Pty Ltd
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of NanNan
    Join Date: 2015
    Post Count: 26

    thank you Jamie

Viewing 6 posts - 1 through 6 (of 6 total)

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