Aaron WhybrowGeneral Manager, Strategic Mortgage Broker

Refinance of Investment Property in Lower Rate

Name: Refinance of Investment Property in Lower Rate
Uploaded: 2022-10-21T02:53:55Z
Duration: 1 min 44 s
Channel: Aaron Whybrow
Description: A short YouTube monologue (Aaron Whybrow) describing a client case study about refinancing an investment property in Sydney to obtain a lower interest…

21 Oct 2022 · 2 min

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1:44

A short YouTube monologue (Aaron Whybrow) describing a client case study about refinancing an investment property in Sydney to obtain a lower interest rate. The speaker reports that modelling a 90% loan on a $1.5M property produced a roughly $20,000 annual repayment shortfall between mortgage repayments and the current rental income, and that rising interest rates would make the gap worse. Based on the analysis they chose to refinance the investment property at a lower rate, keep it as a rental to cover repayments, and pursue a strategy of building a larger deposit (avoiding 90% LVR) to reduce future repayment pressure. The video ends with a call-to-action to have personalized numbers run for listeners.

Questions this video answers

A $1.5 million property at 90% loan-to-value.

About $20,000 (repayment gap).

October 21, 2022.

I've been doing the numbers recently for a client, as with an investment and renting in Sydney. We are now the outcome. I'll tell you the outcome first, the outcome is that we're refinancing the investment property to get a lower rate. The process to take to get to that conclusion was that we looked at what the current rental expense that they're paying for their family at the moment is what it would have been if we borrowed 90% of a one and a half million dollar property. And what we found is that there was a $20,000 repayment gap between what the rent was and what the a mortgage would have been on that property. And then when we changed interest rates upwards, it was just accelerating out of control. So what we decided to do, well, not what I decided to do, but when we ran the numbers, we were able to start the interest rate from a lower level on their investment property and continue getting the rental income there to pay for that property. And then we were able to work on a plan to not go for a 90% loan of a property in Sydney, but look to what they can do to start moving forward with a bigger, bigger deposit because a bigger deposit, less repayment and stick it out with their rental expense at this point in time. So rents on a calculator is just using the actual repayment. When you put rents on the calculator, it's 80%. When you put debt in there, they got more of the buffers. So if you're looking at cost analysis on buying your own place in Sydney, you and looking at an investment property and you want those numbers done from what could happen in the future with interest rates, reach out today and we'll be able to run those numbers for you and give you the numerical confidence to think about what your specific situation could look like when you need to make the next step in either buying your own home or investing.