All Topics / Help Needed! / Portfolio Package & Cross collateralised

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  • Profile photo of JustinmGJustinmG
    Join Date: 2020
    Post Count: 0

    Hey guys,
    please Feel free to correct me if I’m not making sense.
    While listening to a podcast today I came across a lending product called a “portfolio package” from the private/business division of the bank.

    Would using this portfolio/investors package from the bank be cross collateralising the assets? Which I’ve been told is a big no.



    Profile photo of TerrywTerryw
    Join Date: 2001
    Post Count: 16,213

    Cross Collateralising refers to using 2 or more properties as security for 1 loan.

    Portfolio packages don’t necessarily involve crossing security but it will depend on how it is set up.

    There is one well known ‘promoter’ that encourages the use of the St G Portfolio product which is just a big LOC

    They way they suggest is terrible and involves crossing securities.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide)

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

    Hi Justin,

    It would really depend on whose “portfolio package” it is, and just what it entails.   A bunch of years back, I took a portfolio package with one of the big 4, and found out afterward (my dd was shameful !!) that it was charging me a higher rate than Standard Variable so I unwound a lot of it.  It had other benefits, but the over-high Interest Rate initially left a bad taste in my mouth for many years.

    Check first before signing up !!!   Don’t be dazzled by all the “key phrases” they say that make things sound Mickey Mouse – do your DD on them.


    PS  Edited later>>>>   And I recall that cross-collateralisation was also their “default” position (it is better for the bank, but not so good for you).  We had to re-affirm that we wanted NO cross-colls at all.   They listened, but if we hadn’t insisted, it might have been different, so watch out.

    • This reply was modified 2 weeks, 3 days ago by Profile photo of Benny Benny. Reason: Additional comment re cross-coll !!
    Profile photo of JustinmGJustinmG
    Join Date: 2020
    Post Count: 0

    Thanks @benny & @terryw

    I appreciate the help

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