THE BROKER TIMES
Interactive Guide: Investment Refinance
Breaking News for Modern Brokers.
Market Pulse: The Opportunity vs. The Risk
This section sets the stage by visualizing the current market dynamic. Use this data point to frame the conversation with your clients: strong competition from non-bank lenders (the **Opportunity**) is offset by strict criteria due to high lender **Risk Perception**.
The Opportunity: Low Rates
Intense lender competition is driving variable investor rates down. This is the moment to unlock equity for portfolio expansion or achieve significant savings.
The Challenge: Risk Perception
Lenders view investment loans as higher risk, resulting in stricter serviceability and criteria. Technical precision in the application is non-negotiable.
Representative P&I Rate Comparison
Visualizing the pricing gap. Note the aggressive pricing from the Non-Bank sector.
The Broker's Strategic Playbook
Success comes down to technical precision. Use the navigation below to explore the three core pillars of a high-value investment refinance application.
1. Mastering the LVR
The LVR is the gatekeeper to the sharpest pricing and LMI avoidance. Coach your client to strategically reduce LVR where the financial outcome justifies the capital contribution.
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Proactive Equity Assessment
Order a full valuation upfront to confirm equity and set realistic expectations. No guesswork.
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Model the LMI "Cliff"
Show the client the exact cost of LMI vs. a small capital injection to hit the <80% LVR threshold, unlocking better rates.
2. Policy Is Everything
A policy mismatch wastes time and costs the client a credit enquiry. Pre-emptively match the client’s legal structure and loan purpose to the lender’s specific appetite.
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Borrowing Entity Check
Is the client a Trust or Company? Immediately filter out lenders whose best offers are restricted to personal applicants.
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Refinance Source & Purpose
Verify if the desired offer excludes certain transferring lenders (e.g., non-CommBank). Also, confirm how cash-out purpose is treated.
3. The Portfolio Value Proposition
Refinancing is about optimizing portfolio structure, not just rate. Help the investor weigh headline savings against critical long-term features.
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Offset Account Trade-Off
Model if the slightly lower rate on a "basic" loan outweighs the cash-flow and tax-management value of a 100% offset facility.
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Interest-Only vs. P&I
If their strategy relies on I/O, confirm the new lender's rates and terms for I/O don't destabilize their portfolio cash flow.
Client Scenarios in Practice
These case studies demonstrate how applying the strategic playbook delivers quantifiable, high-value outcomes for your investor clients. Click to review the problem, the broker's action, and the outcome.
Case Study 1: The LVR Cliff
Problem:
Client is at 81% LVR, risking a $12,500 LMI premium.
Broker Action:
Advised a one-off $10,000 capital injection to reduce LVR to 80%, avoiding LMI and securing a top-tier rate.
Outcome:
Client saves thousands by avoiding LMI and achieving the sharpest pricing, demonstrating the broker's strategic foresight.
Case Study 2: The Structure Mismatch
Problem:
Client held property in a Trust but was chasing a low headline rate only available to personal applicants.
Broker Action:
Preemptively filtered to lenders with strong appetite for Trust structures, avoiding a guaranteed decline and wasted enquiry.
Outcome:
Successful, swift approval with a trusted policy fit, preserving the client's credit file and demonstrating superior policy knowledge.
Case Study 3: The Feature Trap
Problem:
Client chose a 20bps cheaper "basic" loan, ignoring their $150k in cash savings.
Broker Action:
Modeled the financial impact, showing the net savings from offsetting $150k far exceeded the small difference in the headline rate, recommending the professional package.
Outcome:
Client achieved better net financial results by optimizing loan features over chasing the absolute cheapest rate, proving the broker is a true portfolio architect.