Gary Lin - Mortgage Adviser

Here's another happy client with their mortgage problem soon to be solved.

Clients VS are couples who are doctors owning their own GP practice.

They recently built a home, but are now charged low equity premium across their home and one rental property by their main bank.

Reason that a low equity premium is charged is because their Loan to Value Ratio LVR across two properties are 89%. When LVR is above 80%, banks will charge low equity premium between 0.25% to 1% above normal home loan rates.

Client VS is upset that their main bank couldn't help them, and I was initially unable to help too.

But after further discover of what they do, I found that they have shareholder equity in their GP business.

So my proposal is to raise a business loan of the amount required to bring down the home loan to meet 80% LVR, equal or less than the shareholder equity in the business.

Then either stay with the existing bank with a cashback retention, or if VS choose, refinance to another bank for more cashback, which will also offset some of the break fees to bring their home loan rates back down without the low equity premium.

The result will be that they will achieve a net savings about $15k interest rates paid, and hopefully a bit of cashback $15-20k let over as well!

Just another normal day in the office for a mortgage adviser!

Bad news...NZ annual inflation has increased to 3.1%...

Increasing interest rates now will potentially derail the economic recovery...

All eyes on RBNZ reaction on 19 February OCR review.

Inflation rises to 3.1%, above Reserve Bank's target rate Figures to the end of last year show the cost of goods rising by 3.1 percent.