Raise capital from your home to use for investment and asset building with the Portfolio Loan.
Essentially, this is a flexible credit line where you can combine your investment and personal finances together into a single home loan. Several of the BankSA products work in a similar way to this, consolidating borrowing and affording the borrower great flexibility through the loan.
|Product Name||BankSA Portfolio Home Loan|
|Interest Rate Type||Variable|
|Comp Rate^ (p.a.)|
|Minimum Loan Amount||$10,000|
|Maximum Loan Amount||$9,999,999|
|Minimum Loan Term||1 year|
|Maximum Loan Term||30 years|
|Maximum Insured LVR||80%|
|Mortgage Offset Account||No|
|Mortgage 100% Offset||No|
|Loan Redraw Facility||Yes|
|Split Loan Facility||Yes|
|Fixed Interest Option||Yes|
|Suitable for Investment||Yes|
|Available as equity loan/line of credit||Yes|
|Repayment Type||Interest Only|
|Ongoing Fees||$200 p.a.|
- Has no set repayment term
- Choose to pay monthly, fortnightly or weekly
- There is $200 annual service fee
- There is $700 application fee
- There is $350 discharge fee
Things to consider about this loan
This loan is primarily geared for investment customers. It’s a way in which you can extract equity capital from your home in order to invest in a business, shares, investment properties or any manner of other wealth creation vehicles.
If you take this loan with an advantage package you can get additional benefits. For example you won’t have to pay the $700 establishment fee. In addition you won’t have to pay any monthly account administration fees. Do remember though that you will have to pay an annual fee for the advantage package, of $395.
In order to apply for this loan you will need a good amount of documentation. In general, there will not be low doc options for portfolio loans.
This is certainly a loan you should be considering if you’re looking to build wealth through access to a flexible loan vehicle that help you leverage your investment and employed income.
Features of the Portfolio Loan
- Flexibility in repayments: With the portfolio loan you can choose to make repayments at the frequency you desire (at least monthly). Interest will only be applied to the balance that is outstanding.
- Sub-accounts: You can benefit from up to 10 sub-accounts, each with a setup fee. This makes it easy to manage different investments within your portfolio. You even get separate monthly statements.
- Additional payments: You can make additional payments against your loan principal at any time on variable interest rate sub-accounts. With fixed interest rate sub-accounts it’s possible to make repayments above and beyond your standard amount. This is limited to $10,000 per year. After this level there will be break costs attracted.
- Loan to value: The maximum loan to value with a portfolio loan is 90%.
- 24/7 fund access: You are able to get hold of your funds at any time of the day or night through mobile banking, internet banking EFTPOS, ATMs and over the phone.
- Rate flexibility: Your primary sub-account will always be on a variable interest rate. With your other sub-accounts you can choose a fixed rate for 1,2,3,4 or 5 years, or a standard variable rate.
- Deposit Bonds: Rather than putting a deposit down you can use a deposit bond in order to keep earning interest on your deposit money.
- Discounts with Advantage Package: Benefit from interest rate and fee discounts when you combine your portfolio loan with an Advantage Package.
Fees you can avoid:
- When you combine with an Advantage Package you can eliminate the $700 establishment fee.
- Having the Advantage Package will also enable you to avoid the $200 yearly, per sub-account, account management fee.
Fees you can’t avoid:
- There is a $100 fee per sub-account
- If you go for the discounts available through the Advantage Package you will have to pay an annual fee of $395. If not, you’ll have to pay the establishment fee of $700 and the yearly fee of $200 per sub-account. Alternatively, instead of the $200 per sub-account year you can pay an annual fee of $200 for all sub-accounts.
Applying for this loan
To be eligible for this loan you must be borrowing over $500,000. You will also need to prove income and be able to put down a deposit or utilise a deposit bond. This loan is really geared to those who have portfolio of investments that they wish to manage. You will also need to be over 18 years of age.
In order to qualify for the loan you will need to demonstrate adequate savings history through bank statements. If you’re employed you will need to present payslips or an employment contract. As a self-employed person you will need to provide copies of your tax returns, accounts and so on.
You will also need to detail your current financial commitments in order to ensure that you meet affordability criteria. If you have significant outgoings this may count against you.
If borrowing for an investment property you will need to demonstrate anticipated rental income. This is normally achieved through the presentation of a letter from an real estate agent.
BankSA will also want to understand your purpose for the loan. For example, you could be looking to refinance, purchase vacant land, purchase a property, buy investment properties, or buy to fund a construction or renovation project