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Can I buy a property with 100% borrowed funds?

Yes it is possible to do this without paying Lenders Mortgage Insurance (LMI).

Normally we will do this in the following way:

1. Borrowing 80% of the new property value secured against the new property (to avoid LMI)?

2. Fund the extra 20% (or 25% including purchase costs) secured against another property you own (if possible)

We suggest this is a great way to fund the property for the following reasons:

A. borrowing costs are currently low (staring from 1.79% pa for home loans)

B. creates a negatively geared investment

C. maximises your leverage to enhance wealth created

However there are risks with a high amount of borrowing. These risk can be managed as follows: • having sufficient cash flow to meet loan repayments (interest only loans can assist) • having contingency funds just in case • protecting against interest rate increases

Are you interested in buying a new property with 100% borrowing? Feel free to get in touch on to discuss further.


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