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For today's episode, the Trio are diving into the sophisticated world of investment borrowing and they'll unpack the nuances of leveraging borrowed funds to not just acquire investment properties, but also to optimise the financial structure surrounding your investment to legally optimise deductions.

Despite accountants being tax expertes, they are not mortgage strategists and so it is important that investors understand these strategies and are able to impliment them with their strategic mortgage broker.

Whether our listeners are seasoned investors or just starting out, today's masterclass with Dave will equip buyers with the insights to navigate the complex landscape of investment borrowing.


Dave launches into the ep with the first tip about investment borrowing. But he confuses Mike about good debt versus bad debt. Cate defines good debt, bad debt and terrible debt!

Should buyers try to borrow the full purchase price plus all purchase costs? Surely this could feel alarming for those who are debt averse, but the Trio shed light on when this is a great idea, and why it's so beneficial for investors. 

Cate raises the concept of 106% Loan to Value Ratio and Dave distils how this works, and why it's not an uncommon LVR.

Why is 80% LVR such a well-versed figure though, and what lender benefits to some professionals get to enjoy in relation to higher LVRs?  "If you read in the media, it's all about the cost you have to save for a deposit, but who really saves 20%?", asks Mike. Good question, Mike. The Trio shed light on the reality of this claim.

Is there any reason to set up the investment loan limit for more than the full purchase price plus costs? And when is this a dangerous play? Mike delves a bit deeper... From cash-out policies to drawdown processes, Dave walks our listeners through this complex question. 

"The true cost of your interest rate after the tax deduction is cheaper than the cost of your interest on your home loan (as long as you're above the tax free threshold with your earnings." What does Dave mean by this, and why is this so critical to understand in relation to 'good debt'? 

Which tricky scenarios might fall outside of that general rule of paying interest-only on investment, and P&I on your home loan? Dave has three scenarios, and Cate excitedly recognises that her own personal journey currently fits one of these quirks. 

And lastly, Dave has some general advice for listeners who are planning to upgrade their home and retain their old home as an investment. 

.... and our Gold Nuggets! 

Dave Johnston's gold nugget: "If you're getting strategic mortgage advice, make notes." The retention rate of detailed information isn't often compromised, and it's important for borrowers to be clear on their mortgage strategy and set up.

Mike Mortlock's gold nugget: Number one rule - investment debt is what you want to maximise, and home loan debt should be minimised. 


Cate Bakos's gold nugget: Not being afraid of good debt is important. But being aware of the worst kind of debt is also very important too. Unsecured, expensive and short-amortised debt can be problematic. "I highly recommend you talk to a strategic mortgage advisor if you have that kind of debt." 

Show notes: https://www.propertytrio.com.au/2024/03/25/mortgage-masterclass/