What is Residual Stock?
Residual Stock loans can be helpful in order to free up equity which can be reinvested into other investments.
Here are some examples of how a Residual Stock loan can be helpful:
• Purchase next development site;
• Contribute further equity into a project;
• Provide working capital;
• Release some equity to assist improvement and maintenance of older buildings in developer portfolio; and/or
• Provide cash flow to cover interest repayments on residual debt.
How does the loan work? An interest budget is incorporated into the approved loan amount to cover loan repayments during loan term. No additional repayments are required during this period and therefore no additional serviceability tests are required.
How much can you borrow? We will lend up to 75% of the property value inclusive of interest budget.
What happens when stock is sold? Once a property has been sold our discharge team will make arrangements to partially discharge the mortgage, releasing the sold security property. At this time the loan balance will be reduced by 100%* of the sale proceeds less any reasonable costs.
General Features of Residual Stock Loans
- General Description Designed to allow property developers further time to sell remaining stock
- Loan Purpose Refinance & Cash Out
- Acceptable Security Metro and Major Regional
- Acceptable Risk Grades A & B
- Minimum Loan Amount $100,000
- Maximum Loan Amount^ $25,000,000
- Maximum LVR^ 75% inclusive of interest budget LMI Required No
- Loan Term Up to 5 years
- Repayment Type Interest Only
- Interest Only Term Up to 5 years
- Servicing An interest budget is included in the approved loan amount that will cover repayments in full for the term of the loan
- Additional Repayments Permitted No
- Redraw Available No
- Product Specific Terms No
- Early Repayment Fee to apply upon partial discharge