For those who like to invest in property and other asset classes, having the ability to make quick decisions and access to funding immediately is key to maximising opportunities and your ROI.
One of our lenders has reinvented the traditional ‘Line of Credit’ into a ‘Master Limit’ feature which provides an overall lending limit that is available for your borrowing needs, for now and in the future.
The Master Limit is secured by one property with a maximum LVR of 80% and is valid for 10 years – meaning you don’t need to submit new applications or re-value property each time you want to utilise the line of credit. It’s a simple process of refinancing to access the available equity in your home to secure the Master Limit.
This gives you the freedom to utilise the useable equity in your property how you want, when you want.
Another benefit to securing a master limit is that the initial application is assessed at today’s borrowing capacity metrics. That means that when interest rates go up (and we all know they will), the lender’s assessment rates increase, the Master Limit will remain in place and no further borrowing capacity assessments are required.
You can have up to 10 sub accounts under the Master Limit, utilising them to suit your needs.
Master limit snapshot
Let’s take a look at a scenario using the master limit where the existing home is valued at $1.2M and the useable equity is $600,000. Master Limit will be set at $600,000 in year 1 with the borrower having a requirement to repurpose non-deductible debt into deductible debt. Funds required now are $300,000 with $300,000 still available to use later on. The available funds are held in the line of credit.
Fast forward to when you want to change the structure to purchase an additional investment property four years later…
The Master Limit is still available to $600,000 without the need for credit approval and the loan is easily restructured to meet the borrowers needs at no cost.
So, whether you're ready to purchase your next property now or want to wait six months, a year, or even longer, we can secure the funding for you today using today's borrowing power.
As always, please reach out if you think this lending option might be of interest or if you have any questions.