Spread borrowing?

Our Experts Answer:

There are a few points to raise here. Firstly the difference in criteria between banks when lending to borrowers who are domiciled overseas is large. ASB did change their criteria in regards to this around September so if your request was before then you may have more luck now. Note also that the way you will calculate serviceability is likely to be very different to the way the bank is doing it. You will look at "real numbers" such as income in and expenses out whereas the banks tend to slice off 25% of the rental income and work the mortgage serviceability off higher interest rates and on a principle and interest basis even if you are on interest only. The larger your portfolio the larger the gap between your numbers and the way the bank looks at them. Keep in mind also if you are at business borrowing level they calculate this even more harshly. Note that bankers will often look at your situation and believe there is not sufficient equity available as they may be looking at the GV's for your portfolio whereas often turn market value can be significantly higher. Your situation sounds like a case where you need to get a proper understanding of how your portfolio numbers are being looked at to ascertain why you are being declined so you can understand what options you have moving forward.