Refinancing to Invest: A Real Case Study on Unlocking Equity and Savings

James and Sasha thought they were doing everything right. Both I.T professionals, they’d been with their bank for years, steadily paying down their home loan, slowly building equity. Their rate wasn’t terrible - but they had a feeling it could be better.

When their accountant introduced them to me, the goal was clear:

• Optimise their lending

• Start building their investment portfolio

  
  

Step one: I went to their existing bank and asked for a better deal (sometimes that’s all it takes when a broker asks). But the bank said no - the couple had a healthy offset balance, so the bank was not keen to reduce the rate.

Step two: I found a sharper rate quickly - shaving 0.5% off and saving them over $6,000 a year. But there was more!

When the property valuation came back at $2 million, we saw an opportunity: they could safely increase their loan to close to 80% of the property value, freeing up equity to invest - and the extra lending would be tax-deductible*.

The result?

• Their home loan was refinanced

• They were pre-approved for an investment loan of $580,000

  
  

Plot twist: When they found the right investment property, they wanted to borrow 100% of the purchase price plus costs - a big ask.

But by cross collateralising their home and the new investment property, we made it happen. We secured the funding without them needing to contribute a cent of cash up front.

The loyalty tax nearly cost James and Sasha thousands - but with me, they not only unlocked savings - they also built their next step towards wealth.

*Always seek your accountant's advice as to whether a change in your lending structure will be suitable for your goals.