Australian Property Podcast Show EP499- Increasing Borrowing Capacity With Interest Only

<p>So in today's episode I want to discuss how someone can maximize their borrowing capacity by using interest only lending so if you'd like to get in touch i'd love to hear from you please send me an email at jp today you australianpropertypodcast.com give me a call on</p> <p>0423475336 and please note as always everything discussed here is done so for entertainment purposes only i've not taken into account your personal circumstances nor your risk profile so you should seek professional advice before making any investment decisions so today i wanted to talk a little bit around the scenario of how someone can potentially increase their borrowing capacity by using interest-only lending now a lot of people are probably quite familiar with the concept that traditional banks will actually reduce your borrowing capacity when you're going on interest only and the reason for that is because they're seeing the remaining term after the interest only period um as requiring you know the whole loan to be paid off so for example let's say standard 30 year loan term if you do not have any interest only you're paying off the mortgage steadily across the full 30 years if you have five years of interest only first it means you need to pay off the whole mortgage in the 25 years remaining so typically banks actually benchmark it you know harsher if you're actually um going to basically be on interest only because the remaining term when you're paying principal is going to be shorter now the exception to this scenario is if you're looking at non-bank lending then what happens is some of the non-banks will actually look at other lenders um repayments at the actual repayment or near the actual repayment so for example um in this scenario this is a live one of all very similar to a live one that i've looked at recently so i wanted to actually walk through the exact parameters here so let's say you have um an investor with three properties they're worth 500 000 each and each have a mortgage of 400 000 so basically total debt of 1.2 mil