The loan structure of your investment property portfolio is one of the most important things that can affect whether your property investments are performing the best they possibly can. And it should be reviewed at least once every three years, or when your circumstances change.

We interviewed Lead Investment Services Manager, Pippa Rowntree, and Christine McGregor, Director and Credit Advisor at My Mortgage Manager to find out how one client restructured their loans in order to achieve the highest return for their investment portfolio.


Q: Can you tell me a little about the client?

Pippa: The client was a lovely husband and wife couple, Bill and Kathy*. They are owner-occupiers of their main residence and currently have four investment properties in their portfolio around the Newcastle area.

Q: What was the trigger for them to review their finances?

Pippa: I was already in discussion with Bill and Kathy on how they could improve their return on investment for each of their four properties. As part of our conversation, it was revealed that they had received a letter letting them know their interest-only investment loans were about to change.

As part of my role, I provide access to a team of experts that can be tapped into based on the requirements of each client. In this instance, I introduced Bill and Kathy to Christine for further independent advice, to conduct a review of their finances, and offer suggestions on how they could restructure their loans.

Q: Tell me more about the client's financial situation

Christine: Bill and Kathy’s existing home loan and investment loans were with a major bank lender, with borrowings totalling approximately $1.5m.

Their owner-occupied Home Loan was variable rate, and investment loans were fixed-rate interest only, which were due to revert in April 2020 to a principal and interest variable loan at a rate of 5.84%p.a.

Q: What was the approach you took?

Christine: I saw that the best strategy for Bill and Kathy was to restructure their portfolio of loans to ensure standalone security to mitigate their risk. This approach would ensure that they could control future sale proceeds, not the bank if they sold one or more of the properties.

I also searched for the best loan option available that would suit their requirements. I looked at the loan offerings of over 40 lenders, ranging from International banks, major & regional banks, regional credit unions, mutuals and fintech lenders.

I obtained details on the early break costs for the existing fixed-rate loans. Then, incorporating all associated costs to refinance, I was able to negotiate a positive financial outcome for Bill and Kathy by refinancing to a lower interest rate.

Q: What were the key outcomes for the client?

Christine: There were several great outcomes that I was able to achieve for Bill and Kathy:

  • A reduction of $383 in their principal and interest repayment per month for their owner-occupied property,
  • A saving of $1800 in interest payments per month on the investment loans,
  • Non-cross-securitisation of their loan portfolio, i.e. standalone security, gives more control over future property sales,
  • A reduction in interest payments of over $25,000 per year.

Pippa: Needless to say, Bill and Kathy were ecstatic that Christine was able to put such a robust strategy in place for them. It provided them with greater flexibility, reduced their monthly payments considerably, and set them up for the future.

Q: What's the key takeaway for owners?

Christine: There are always new financial products being brought onto the market, and right now, we are seeing some very competitive interest rates. Because of these constant changes, it’s always a good idea to regularly review your current financial situation and plan for your future investment strategies. And that’s where we can help!

Pippa: We would encourage you to connect with our Investment Services team to see how we can assist you in achieving a better outcome for your investment portfolio, such as structuring your loan to achieve the highest return.

If you are considering restructuring, our Investment Services team can ensure the right conversations are had with your accountant and financial advisor so you can make an informed decision. Understanding how equity can be released from one investment property to buy another, your tax position, and financial opportunities is paramount, and our team can offer you this clarity. Get in touch with our Investment Services team today for objective advice and insight.


*Names of the clients have been changed to protect their privacy.

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Key Takeaways

This information is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.