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LVRs Under Review by the RBNZ
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Where is the property and where do you live?Free online Property Investment Course from iFindProperty, a residential investment property agency.
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All 'banks' require 70% LVR in Auckland, 80% elsewhere.
Non bank lenders (Resimac, etc) don't have to listen to the LVR rules, but charge higher interest rates.AAT Accounting Services - Property Specialist - [email protected]
Fixed price fees and quick knowledgeable service for property investors & traders!
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For Auckland all Banks limited to 70% on a standalone, if other property in the mix then cross charging can occur which may help. If standalone then non Banks can assist and my take is this. At 80% they would charge say 5.15% for two years as opposed to a trading Bank at 70% charging 4.25% which you can't have at 80% so it's irrelevant really. Per $100,000 borrowed the 'higher' rate is $900 a year more expensive, not a lot especially if it means you can buy now and take advantage of capital gains over the next few years. There are also 90% funds available closer to 6%, only a few of us have access to these. Hope that helps!www.ilender.co.nz
Financial Paramedics
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LVR percentages - What is a safe level
Hi All,
I have a current portfolio LVR of 63% across 3 tenancies, not looking to add to this yet as I am trading but wanted to know what would you all consider a safe level in the current market, especially now that all banks are looking for 40% deposits.
Cashflow is good at present so should I just sit and wait, also plenty of equity in PPOR so no pressure there either.
FH"DEBT BECOMES IRRELEVANT WITH INFLATION".
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Originally posted by Frezzinghot View PostOur accountant says pay down PPOR debt first with trading $$, then rentals.
FH
Your accountant would say that as the debt on the PPOR is not tax effective. You need to not only consider the tax effectiveness of paying down debt but the opportunity cost of doing so.
While that debt if you're in the highest tax bracket will save you 33% is meaning you're not getting a 33% refund if the debt was sitting against an investment.
Consider your tax rate and what you might otherwise use the funds for - if you get a better return elsewhere don't pay down PPOR.
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