We have been thinking about more ways in which we might be able to help our landlords weather the financial impacts of COVID-19. The understanding and generosity of many of our clients has been heart-warming, even though many have been heavily impacted. Given a mortgage is usually a rental property’s biggest expense, we reached out to CRU Private Finance to discuss how we can help our clients refinance to a better loan.  

As we approach six months since COVID-19 changed our lives, we are aware that many of the banks that had postponed repayments will soon be looking to start receiving repayments and wanted to assist in finding an alternate way of managing property expenses. CRU Private Finance provided us with some examples of interest savings that they had secured for their clients, a few of which are provided below in the hope that they help and inspire you too. 

Example 1: Annual interest savings of $30,000 & ongoing cashflow benefits of $25,000

A hospitality senior executive was frustrated with an existing long-term relationship with his bank as it had become largely reactive and had constant account management changes. CRU Private Finance reset his loans with another major bank on better pricing and credit terms. Placing this client in the Private Banking division of a major bank, with experienced relationship bankers, was a high priority. This resulted in annual interest cost savings of $30,000 and annual ongoing cashflow benefits of $25,000 due to a better loan structure and terms. 

According to CRU Private Finance, this was a classic example of complacency by their client’s current bank whereas a new bank was prepared to offer a premium package to win the business. The total amount of debt that was refinanced was $3.5M, which comprised three loans: residential investment, home loan and commercial investment.

Example 2: Annual interest savings of $35,000

CRU Private Finance was able to reset the existing investment loans of their client, a sophisticated expat investor with five Melbourne residential investment properties, from the Retail platform of one of the Big Four banks to the Private Banking division of another Big Four bank. The result was an annual interest cost savings of $35,000 for their existing loans.

CRU Private Finance secured a simple, market-leading loan package for this client’s new investment debt without the cumbersome risk restrictions often placed on non-resident expat customers. The bank’s new high touch relationship service was well received. This is an example of restrictive risk terms and lazy pricing provided by their incumbent compared to a fresh approach taken by a new bank who was highly motivated to win the business.

Example 3: Loan lifetime savings of $672,000

Private business owners, with multiple business trading sites, were frustrated with the total lack of understanding and risk appetite from their existing bank. These clients needed expansion funding and their complex cashflow needs were not well understood by their existing bank, even though they had been with this bank for a long time.

A total new and existing debt package of $5.5M was provided by a competing bank that was able to demonstrate a better understanding of their business operations and the industry they operate within. The clients successfully refinanced their existing investment property debts on better pricing and terms saving $33,000 per annum or a $672,000 saving over the life of the loans. This is an example of the existing bank not understanding the clients’ business or needs.

CRU Private Finance is a Kay & Burton Concierge Partner. Please contact Kay & Burton Concierge on 03 9825 2000 or via concierge@kayburton.com.au to engage the services of CRU Private Finance. 
For more information about Kay & Burton Concierge, please visit https://kayburton.com.au/concierge.

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