Скачать или смотреть FAQ - How do LVR (Loan-to-Value Ratio) restrictions affect my existing portfolio?

How do LVR loan to value ratio restrictions affect your property portfolio?

This is a great question and one of the most important things for property investors. LVR rules are set in place by the lenders, and they limit the amount of money that you can loan against the property.

Traditionally, the limits for this are 80% against your owner occupied house, and currently 70% against your investment property. Now, disclaimer, these are always changing and different lenders have different LVR restrictions. This can also change based on the property type. So for example, the RBNZ encourages customers to purchase new build properties.

So you can purchase a new build home with a 10% deposit for owner occupied and also a 10% deposit for an investment property. So there's a lot of flexibility in that regard, but the important thing to understand is that LVR positions are always changing. That's why a strategy session with a blueprint adviser, you'll be reviewing this.

You'll be understanding where you're at with your property and what LVRs you can lend up to. Or what limitations are in place. So for example, if you're looking to access equity to purchase another property, LVRs will be set in place on your property. And these will be different at each lender. The key reason they'll be different is because each lender values properties differently.

So once you've determined how much each lender is gonna lend against your property, you then need to understand the LVR restrictions. At some banks, especially non lenders, you can exceed standard LVR restrictions that have been set in place.

So for our investors who want to maximize their opportunities to purchase property, they might look at these sorts of opportunities with non-bank lenders or exceeding the LVR limits at their existing bank if they're allowed on certain products. When this happens, it allows us to access more equity for our customer, and then they can look at different types of opportunities.

This is always different per client and per property type that's involved in the transaction. So a review allows us to give a very specific recommendation on how much equity you can actually access and go from there. Generally, if you're borrowing more money against your property or you're exceeding the LVR restrictions, you might be charged a higher interest rate from a non-bank lender, or what's called a low equity margin.

So this is a fee that the banks put in place for you to borrow more against your property. Generally, it's added onto the interest rate. Sometimes it's a upfront fee, which is capitalised on the loan. With the add to the upfront interest rate, it could be anywhere from 0.3% to 0.15% with this loaning,

generally, if your property value increases over time or you reduce the debt on your mortgage, you can get the low equity margin removed. It's a handy tool that allows clients to get in with a lower deposit, even though I have to pay more upfront rather than having to save their deposit and wait in the future where property prices may then increase.