The Mortgage Down solution for owning an Investment Property and paying off your Home Loan sooner
Mortgage Down is a combination home loan and an investment home loan that allows you to reduce your home loan interest rate and own your own home sooner.
Mortgage down is a lending product for the property investor who also owns their own home. Mortgage Down was developed after a 2-year submission to the ATO by Loan reducer who held the Licencing and the Australian Tax Office (ATO) Product Ruling PR 2021/13. The first product ruling was 2017/6.
Mortgage Down is a specialised loan product consisting of 2 loans. The borrower must to be a homeowner and a property investor. The home loan is a low rate principal and interest mortgage on your own home. The other is a principal and interest on the investment property.
We aggregate the overall debt approved to reduce the debt on the non-deductible home loan.
It has been tried in various formats over the last few years but has always been knocked back by the ATO. It usually involves capitalising interest on the investment loan. Brokers and investors lost interest as it became too hard. The previous ATO Product rulings PR 2021/13 gave legitimacy to a lender aggregating home and investment debt for a lower rate on the home loan. The product has significant benefits to the homeowner with an investment property. It is the new way to buy an investment property.
The home loan has a floor rate of RBA current interest rate plus 0.5%
The Investment loan rate has a ceiling rate.
Ask your advisor.
Because it allows much more flexibility with your finances. E.g. If you are saving $500/month by using the Mortgage Down solution there are many more options available to you.
Pay off a credit card, increase offset account, buy additional property, help kids with first property purchased etc. whenever you can save money you have more options
Ask your advisor.
It won’t take into account the time and money saved over the long term and the ability to pay off the home sooner.
Remember Mortgage Down rates are linked to the RBA and with a flat yield curve over the foreseeable future it means you could have years of low home loan repayments
They may wish to refinance their existing properties or even add an additional investment property or shares to their portfolio using the Mortgage down solution
The TMD’s are available on the website. Download – Prime-Investment-Variable or Download – Prime-Owner-Occupied-Variable
Financial planners and Accountants can see the significant benefits of Mortgage Down but can only advise their clients not implement or transact the loan
As brokers are the only advisers who can write the loan all clients must be referred to an accredited Mortgage Down brokers. This puts brokers in an ideal position who have (or are developing) relationships with accountants, financial planners and other introducers.
Contact the director at customerservices@cschl.com.au
However, if you are a Credit Rep with one of the aggregators they may not allow you to use Mortgage Down. We are on some of the smaller specialised aggregators panel. You will have to contact your aggregator and discuss. Some of the aggregators do allow you to write Mortgage Down others review on a case by case basis.
Contact us for our experience in this area to see if we can help.
Q&A for the Investor
Chances are they may not know of it. Also a number of brokers do not understand the benefits of Mortgage Down or have not been accredited.
Mortgage Down is a specialised product available to the home owner/ investor only.