There are a number of options available for investment finance.

It should be noted that only a few lenders will lend to 95% Loan Value Ratio (LVR) on the property. Funds for the purchase (deposit & associated fees) can be obtained with cash funds or by using the equity in your existing property (s).

There are two ways to access the funds;

Cross Collateralizing

Cross collateralizing means that you are financing the new property to 100% of its value and

borrowing the fees on top. This is secured against the equity in another property and this ties the properties together. It is almost as if there is only one security.

The only time this can cause a problem is when the original security property is sold then the investment property will need to be revalued and any excess over the allowable 95% LVR reassigned to another security. In most cases, however, the investment property has grown in value over time and can stand alone.

Lenders Mortgage Insurance (LMI) may be avoided if the total LVR (combination of total loan to both properties) is less than 80%.