Effective leveraging

Question from Nathan updated on 8th March 2019:

I have two investment properties worth $850,000 with a mortgage of $400,000 in New Zealand but I live in Australia. I have been told I can use $70,000 of equity towards my next investment property. Does this sound right or is there a better way to get into my next property?



Our expert Kris Pedersen responded:

It sounds a bit low. You should be able to leverage these to 65% which would release $152,500 or a further $82,500 above what you have been told. If you then used this as a 35% deposit for a new purchase you could buy something up to the value of circa $435,000. Also, note that you may be able to use non-bank options to leverage further than the above numbers suggest as well.





Kris Pedersen of Kris Pedersen Mortgages is a commentator on property and finance. His team sources top finance strategies. www.krispedersen.co.nz

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