Intuitive Finance recommended that whilst Michael and Sally’s earning capacity was still strong, they use the equity from their home to increase their borrowings on that property to a lower LVR of 65%. This lower LVR meant that they would be able to hold and maintain properties well into their retirement, and write a new loan at more favourable rates at the same time. The equity unlocked by doing so could be used to purchase 1-2 quality properties also at reduced LVRs, giving them the opportunity to generate capital growth over the medium term, while providing rental income to cover most of the increased funding requirements of the new debt.
Michael and Sally were able to comfortably purchase an investment property and were surprised at how easy it was to do so. They now have two investment properties allowing them to enjoy the finer things in life well into retirement.