LMI or not?

Problem is howto finance first IP...



I don't think it matters about PPOR, but the info is:

- PPOR is at 80% LVR, Commbank, in my name only.

- PPOR is being reno'ed, so can't do a valuation at the moment (eek if a valuer looked inside and saw missing kitchen, tornup bathroom, etc).

- PPOR reno budget coming from offset - about $60k in the next 6 months.

LVR scenario:

Lets say I had another $125k available in the offset that I wanted to put into an IP.



Lets say I wanted to go for relatively quick CG to recycle on a reasonably aggressive strategy, so I want to buy in a pretty central location: so I'd like to purchase a $500,000 IP.

I'll assume 5% costs which is $25,000.



At 80% LVR, I would put up $100,000 + $25,000 = $125,000, and the loan $400,000.

At 82% LVR, it would be $115,000 cash, loan $414,000 (assuming LMI 1%).

At 84% LVR, it would be $105,000 cash, loan $425,500 (assuming LMI 1.3%).

At 86% LVR, it would be $95,000 cash, loan $437,300 (assuming LMI 1.7%).

At 88% LVR, it would be $85,000 cash, loan $451,000 (assuming LMI 2.5%).



So the sweet spot (assuming LMI's I used are about right?) seem to me to be an 84% LVR, putting in $105,000 cash, leaving $20,000 for reno or to leave in PPOR offset until next IP.



However, I *could* put in enough for 80% LVR and have no LMI.



I assume if I want to build fast, I'd go to a higher LVR to have cash available for the next IP (and toss and turn at night :o). eg. I could go 88% and have $40,000 for another immediate/near IP start.

Question: I believe there may be other disadvantages to going *any* LMI though - such as problems transfering loans between banks.



If you were doing your first IP, are there any (other) adv/disadv of going >0 LMI early on in a moderately aggressive strategy?

LMI or not?