Combine Your Home Loan and Investment Loan to Save

Do you have a current home loan? Pay only 2%* when you refinance your home loan with an existing or new investment loan. 

With interest rates at records lows, now is the perfect time to refinance or extend your property investment portfolio. Introducing the Ultra Variable Rate via Portfolio Plus Home Loan. It offers greater flexibility with features including a 100% offset account, redraw facilities and flexible lump sum payments. The best part is the low interest rate, only 2%* per annum on a variable rate. Take a look at some of the loan features:

Owner Occupied Home Loan

  • Loans up to 90% of valuation
  • Loan options: principal & interest repayments
  • Loan purpose: purchase or refinance of an owner occupied loan
  • 100% offset account available
  • Up to 40 days interest free on Visa Debit Card purchases^
  • Extra repayment can be made at any time without penalty

Investment Home Loan

  • Loans up to 90% of valuation
  • Loan options: principal and interest or interest only repayments~
  • Loan purpose: purchase or refinance of an investment property loan
  • 100% offset account available
  • Up to 40 days interest free on Visa Debit Card purchases^
  • Extra repayment can be made at any time without penalty

Contact an EasyPlan mortgage broker today to learn more.

ENQUIRE NOW


*Terms and conditions apply including an application fee of $350. #The comparison rate displayed is based on a loan amount of $275,000 over a 30 year term. Interest rates are correct as at 9 August 2016 and subject to change at any time. Warning: This Comparison Rate applies only to the example given. Different amounts and terms will result in different Comparison Rates. Costs such as redraw fees or early repayment fees, and costs savings such as fee waivers, are not included in the Comparison Rate, but may influence the cost of the loan. ^Available on purchases and cash advances to a maximum of $4,000 per month. `Application fees apply per portfolio facility. Valuation, solicitor documentation and settlement fees also apply. ~Interest only repayments up to a maximum of five years.

 

3 ways to help your children own their first home

It’s no secret that the property market is getting more and more difficult to enter with each generation that reaches adulthood, leaving many young adults feeling as though they’ll never begin their property journey. However, as parents, there are plenty of steps you can take to ensure that your children get the best possible start in the property game. All parents want what’s best for their children, and that is why we’ve giving you 4 ways to help them own their first home:

1. Educate them on saving

The hardest part for young adults trying to get a foot in the door of the property market is to come up with a deposit. The younger generation tends to be more careless with their cash, and often rely on Mum & Dad to foot their expenses, such as phone bills or rent. However, by teaching them the value of money from an early age, you are giving them a valuable head start. From their first job as a teenager, your children should begin saving a portion of their pay each week. Every little bit counts, and by encouraging the importance of saving from the get-go, the better chance they will have of being able to make important purchases (like property) in the future.

2. Explain the other costs of purchasing property

Coming up with the deposit to buy a house may be the most difficult part, but it is important that your children are aware of the other expenses associated with purchasing property. There are plenty of hidden costs when it comes to buying a home, such as council rates, stamp duty, legal fees, lenders mortgage insurance, and more, that need to be factored into their budget to help avoid any surprises!

3. Become a guarantor for their home loan

What can you do to help if your child has a steady income and you believe they are financially responsible enough to own a home, but they don’t have enough saved for a deposit? You can act as guarantor on their home loan by using your own property as security. Obviously, you should only act as a guarantor if you believe that your child is capable of repaying the home loan themselves, otherwise you put yourself, and your own home, at risk. Before you commit to anything, make sure to sit down and have a conversation about the expectations for both parties involved.

The pros & cons of investing overseas

When you’re thinking about expanding your investment portfolio to include overseas interests i.e. international stocks, property or business expansion, it’s important to be aware of the rewards, as well as the risks. There is an extensive range of investment strategies that include overseas investment but it’s best to weigh the rewards and risks before you take your money elsewhere. While every financial situation is different, here are the pros and cons of investing overseas.

 

Pro: Relieve Tax Requirements

It’s no secret that certain international investment opportunities offer tax incentives. Many small countries welcome foreign investment as it stimulates a flow of foreign currency which in turn aids their domestic economy. In return, as an investor, the scale of tax compliance is lowered. You can expect consumer markets to flourish under comparatively loose tax criteria which can lead to profits under the umbrella of international law security.

Con: High Risk

When a foreign market lacks the regulations of your domestic industry the result is uncertainty. Take for example influences like energy prices, new governments, potentially brought in outside of democratic enterprises, or natural disasters that can create a highly uncertain environment. The flow on effect of instability in a foreign market means the risk of unforeseen recessions. Outside of your control, as well as standardized controls, there is a real possibility of investment loss at the hands of a fluctuating market.

Pro: Diversify Your Assets

An overseas investment can allow you to diversify your portfolio in a way domestic investment cannot. From this comes the knowledge that your assets will be protected if an economic downturn strikes your core domestic interests. On top of this, with the world increasingly connected and commercialised it stands to reason that you’ll miss opportunities if you limit yourself to a domestic market.

Cons: Ongoing Costs

International investment leads to a number of associated costs, with possible transaction fees, management fees and custody fees trimming your investment’s profitability from the start. While these are also costs to be dealt with when investing in your own country, they are typically higher overseas.

Pro: Investment Confidentiality

Maintaining privacy of your overseas investments can result in significant profits. With many international markets operating under strict corporate confidentiality, investors are able to suppress the knowledge of their business to others. This is beneficial as you could invest in a publicly traded company without your competitors knowing. As a general rule, share prices increase the more they are traded, which allows you to get into an investment opportunity before your competitors drives up the cost by following you in.

Con: Currency Risks

International investment can occur on both a short and long-term scale. However, the unpredictability of foreign currency makes a short term initiative risky. It is generally accepted in finance that time helps smooth out volatility, which means a short term investment strategy may leave you with losses if you are forced to sell out and the market is in a down turn. If the currency change lowers your dollar value, you may find your investment to be worth far less than it previously was.

Investment Spotlight: Using a bank loan to purchase a property overseas.

Applying for a bank loan to fund overseas property buying can be a useful tool to kick start your international diversification. Not all banks will provide finance for an overseas security though, so the loan may require further collateral. However, with many of the large financial institutions operating around the world there is a pre-existing network for you to utilise. Keep in mind though that in addition to the normal loan application requirements you may need to show additional documents.

The global market offers a wide range of investment opportunities internationally. Knowing when to expand and when to consolidate are two constantly moving goal posts so stay informed and talk to the Easy Plan Team to make an informed choice.

Home loans for off-the-plan investments

Buying off the plan can be a great move if you know what you’re doing.  Property growth (especially in the property bubble we’ve been seeing recently) can mean by the time the property is built, your property is already worth hundreds of thousands more before you’ve even paid for it.

iStock_000015394053XSmall

 

Off the plan home loans are a bit trickier, though, as some banks are reticent to give you a loan in advance before the value of the property is known, or the likelihood of the project falling apart proves too much of a risk.

Deposit

Typical off the plan properties require a deposit of around 10%.  This will usually come in the form of a bank guarantee, but others require a deposit bond or cash.

Rising Interest Rates

Knowing what your repayments will be like is good research, but be mindful that the interest rate now might not be the interest rate when the project is complete.  Have some estimates around a fluctuating interest rate to give yourself an idea of what your capabilities are like.  There’s nothing worse than a surprise interest rate jump to price you out of your new property once you’ve already committed to buying it.

Tax Advantages

Depreciation claims in the first year of an off the plan investment can typically range between $8,000 and $14,000 depending on your property.  If you’re settlement is 12 months or more before the development is finished, you may be eligible for a 50% capital gains tax exemption with the ATO.

Stamp Duty

Different states have different laws on stamp duty exemptions.  Look to your state’s information on whether or not you can save on having to pay stamp duty on your off the plan property.  Currently, Victoria, NSW and South Australia have concessions for off the plan properties for their stamp duty.

Bankruptcy

With the property not actually built, there’s always a risk that the company could go bankrupt.  If the project just falls apart, you will get your deposit back.  If the company goes bankrupt, there’s a serious chance you might not. Research your potential development company to see their track record to give yourself some peace of mind.

Time

When buying off the plan, you have the added luxury of time.  The mortgage doesn’t have to be organised straight away.  If you’re planning on being the owner occupier, you have a much easier time in selling your place, with a fixed date in mind.

You also have the added period to save money.  If it’s going to take 18 months to build, that’s an extra 18 months you get time to save towards a mortgage deposit or an offset account.

Home loans for off-the-plan investments

Buying off the plan can be a great move if you know what you’re doing.  Property growth (especially in the property bubble we’ve been seeing recently) can mean by the time the property is built, your property is already worth hundreds of thousands more before you’ve even paid for it.

iStock_000015394053XSmall

Off the plan home loans are a bit trickier, though, as some banks are reticent to give you a loan in advance before the value of the property is known, or the likelihood of the project falling apart proves too much of a risk.

Deposit

Typical off the plan properties require a deposit of around 10%.  This will usually come in the form of a bank guarantee, but others require a deposit bond or cash.

Rising Interest Rates

Knowing what your repayments will be like is good research, but be mindful that the interest rate now might not be the interest rate when the project is complete.  Have some estimates around a fluctuating interest rate to give yourself an idea of what your capabilities are like.  There’s nothing worse than a surprise interest rate jump to price you out of your new property once you’ve already committed to buying it.

Tax Advantages

Depreciation claims in the first year of an off the plan investment can typically range between $8,000 and $14,000 depending on your property.  If you’re settlement is 12 months or more before the development is finished, you may be eligible for a 50% capital gains tax exemption with the ATO>

Stamp Duty

Different states have different laws on stamp duty exemptions.  Look to your state’s information on whether or not you can save on having to pay stamp duty on your off the plan property.  Currently, Victoria, NSW and South Australia have concessions for off the plan properties for their stamp duty.

Bankruptcy

With the property not actually built, there’s always a risk that the company could go bankrupt.  If the project just falls apart, you will get your deposit back.  If the company goes bankrupt, there’s a serious chance you might not. Research your potential development company to see their track record to give yourself some peace of mind.

Time

When buying off the plan, you have the added luxury of time.  The mortgage doesn’t have to be organised straight away.  If you’re planning on being the owner occupier, you have a much easier time in selling your place, with a fixed date in mind.

You also have the added period to save money.  If it’s going to take 18 months to build, that’s an extra 18 months you get time to save towards a mortgage deposit or an offset account.