Give us a call: (09) 486 4719
btn book free consultation


Email me when new posts are made to this blog

Do I need a deposit to buy an investment property?

January 29th, 2018.

The quick answer is no – not in the general sense where one needs to be saved up. Over time you may find yourself comfortable with your existing mortgage repayments, particularly if you took your mortgage out a while back – perhaps 5 or 10 years ago, and are facing rates which are at historical lows now. If you are in this position it is also likely you may have built up equity in your property over time, due to both principal repayments and also strong asset growth in the recent rising market.

Utilizing or “leveraging” this equity will allow you to have access to capital for the deposit for your next property purchase. This means that you fund the deposit for your investment by borrowing the deposit itself too. The more equity you have – provided you can meet the servicing requirements, the more you can continue to invest. As time is the most important aspect in the appreciation of any investment, the earlier you can buy more (quality) investments, the better the long-term expected real-return (asset value and potentially rental increases over time too).

Let me explain further; by using your home as security, you’ll be able to borrow back up to 80% (top-up) of the current market value of the home (based on current LVR rules), which means you’re releasing equity that you’ve built up within your home over time.

Ideally, what you want to do (and what we recommend) is that you split bank your investment property from your owner-occupied property. Your current bank will typically (as is their job to try to get all of your business) offer to 100% finance your property by using your home as security. This means using your equity and income to get pre-approved for a new purchase up to a certain dollar value based on your limits – but also will mean your properties are cross-secured.

Another option – known as split banking, would be looking at getting a revolving credit for the deposit required for the investment property.

For example, let’s say you owned a home which is now worth $1m. You have debt against this property with bank A, of $400k. You have been looking at the market, and would like to buy an investment for $500k. Based on current LVR rules for investments (35% deposit and 65% loan) you would need to come up with $175k as a deposit for this purchase. As we are aware you can top-up to 80% on your home, it means we have another $400k of equity in which we can use for funding deposits – in this transaction however we will only need $175k of this. The other $325k will then be funded by bank B – which will take security over your residential investment property. By using this strategy you have successfully 100% financed an investment property, and also kept your investment and personal assets away from one another in the sense that they are not cross-collateralized.

Another thing to consider is the tax deductibility of this debt which relates to the investment property (the portion with both bank A, and bank B).

Understanding these concepts could mean material differences in how quickly you progress on your journey of wealth creation – but also the subtle differences in your ability to protect your assets adequately while also maximizing your tax benefits.

Contact us today to book your free Finance Strategy Meeting.


Kelmami says ...
Priligy Venta En Chile Buy Super Kamagra <a href=>ou acheter du viagra a paris</a> Cialis Comprar Receta Berodual Without Prescription Zentel Pills Nashville
Dann says ...
Hi there! Do you use Twitter? I'd like to follow you if
that would be ok. I'm absolutely enjoying your blog and look forward to new posts.

cialis Canada Comprar Viagra
ruwkoq says ...
how to order cialis online safely
<a href=>buy cialis online usa</a>
ptnxek says ...
viagra generico funciona igual
<a href="">order viagra online cheap</a>
ituwmu says ...
cialis generic online pharmacy
<a href=>herb cialis</a>
Isaac says ...
зеркало Betcity зеркало Betcity
Zelma says ...
БК "Betcity" каждый раз запускает новое зеркало, на новом домене, взамен
блокируемых ресурсов. Суммарное число альтернативных сайтов крайне велико, по
этой причине не следует оставлять закладки на определенное зеркало.

Использование пользователями игровой платформы оффшорной
букмекерской конторы Betcity с периодически меняющимся адресом,
позволяет осуществлять следующее:
• получить доступ в личный кабинет;

• получить доступ к статистике аккаунта;
• делать любые ставки;
• оперировать собственным игровым счетом;

доступ к Бетсити доступ к Бетсити
Star says ...
порно с неграми
порно с неграми онлайн
Онлайн порно с неграми порно
с неграми онлайн
Новое порно с неграми видео онлайн
opitotesiqa says ... - Amoxicillin <a href="">Amoxicillin 500 Mg</a>
DennPhyday says ...
Resolving to develop elusive and asymmetrical <a href="">tadalafil cheap</a> and your basics should be ironic and educating to premedication you were regarding awe these gonadotropin
Pandora says ... Yeezy Supply Pandora Yeezy Air Force 1 Nike Air Force 1 Nike Air Max 270 Kobe Bryant Jersey Kobe Bryant Jerseys For Sale Kobe Bryant Jersey 24 Kobe Bryant Website Official Pandora Bijoux Yeezy Yeezy Yeezy Shoes Nike Shoes NFL Jerseys Yeezy Boost 350 Yeezy Yeezy Shoes Yeezy Yeezy Yeezy 350 Yeezy Yeezy Shoes Adidas Yeezy Yeezy 700 Nike Outlet Yeezy Shoes MLB Shop Adidas Yeezy MLB Jerseys Yeezy 380 Yeezy 380 Nike Outlet Human Races Human Race Shoes Uggs Official Site Pandora Basketball Jerseys Basketball Jerseys Cheap NBA Jerseys Nike Outlet Pandora Canada Pandora Charms Pandora Jewelry Pandora Outlet Pandora Jewelry Official Site MLB Jerseys Pandora Pandora Bijoux Adidas Yeezy Pandora Soldes 2020 Yeezy Shoes Yeezy Mafia
iktrqodpsb says ...
Do I need a deposit to buy an investment property?
<a href="">aiktrqodpsb</a>
DL-Panthenol Powder says ...
DL-Panthenol Powder
20mm Pvc Adaptor says ...
20mm Pvc Adaptor
Chain Link Fence Making Machine says ...
Chain Link Fence Making Machine
Power Supplies says ...
Power Supplies
DL-Panthenol Powder says ...
DL-Panthenol Powder
Disk Filter says ...
Disk Filter
Chevron Marble Mosaic Tile says ...
Chevron Marble Mosaic Tile
5 Inch Usb Fan says ...
5 Inch Usb Fan
150 Watt High Bay Led Lights says ...
150 Watt High Bay Led Lights
Fashion 03.705.13 Damen Pantoletten says ...
Sporting Type Scope
DYWOZDP Manche Extra Long avec Corne et Chaussure de Voyage Corne-Chaussure Corne-Chaussure Corne Double Face INOX. 41 cm de Long
Sony PlayStation Portafoglio Wallet Bifold PlayStation Bioworld
2955 Blacksmith black
Fashion 03.705.13 Damen Pantoletten
Pantofole di Cotone da Donna.Donne Antiscivolo Peloso Muto Casa Calda Overed Peluche Grigio Pantofole Chiuse Gli Amanti del Pavimento Coperto Il Cotone Leggero E Confortevole Scarpe Striscia Elastic says ...
Chaussures en Maille Chaussures Décontractées à Imprimé Léopard Outdoor Confortable et Respirant Chaussures de Course.Apricot.36
Guizhou Normal University
N / A Lady Sandals. Zapatillas de Verano de Suela Blanda Antideslizante. Sandalias de Playa Casuales para Hombre-Black_41
Pantofole di Cotone da Donna.Donne Antiscivolo Peloso Muto Casa Calda Overed Peluche Grigio Pantofole Chiuse Gli Amanti del Pavimento Coperto Il Cotone Leggero E Confortevole Scarpe Striscia Elastic


“ *As a rule, we advise that you contact us as early as possibly to secure the most suitable time for your consultation.
Product Query

First Name*


Kris Pedersen Mortgages Limited

+64 9 486 4719
Skype: Kris_Pedersen    
Takapuna Office
388 Lake Road
Auckland 0622
Newmarket Office
Level 6
135 Broadway
Auckland 1023
Postal Address
PO Box 33650
Auckland 0740