A director of a business just over a year old, paying himself a salary for six months, wanted to release $575,000 of equity to invest in shares. We placed $1,730,000 of lending with NAB on his income alone.
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A married couple with one child. He is a joint director of a financial advising company registered for GST since May 2024, and has paid himself a base salary of $400,000 since January 2025. She is currently a stay-at-home mum.
They have owned their home since December 2017 and built substantial equity in it. Given his profession, he is a sophisticated investor and instructed us on his preferred strategy.
They had the equity and the income. What they lacked was a long enough track record for most lenders: a business just over a year old and six months of director's salary.
The whole application rested on his income, with none relied on for his wife. If his salary could not be counted, the strategy could not go ahead.
| Item | Value | Facility | Purpose |
|---|---|---|---|
| Home loan split | $2.5m home | Refinanced to NAB as a $1,155,000 owner-occupied split at 5.54% | Non-deductible |
| Investment split | $2.5m home | $575,000 released as a separate split at 5.94% | Deductible, invested in shares |
| Car loan and two credit cards | $85,000 | To be paid out before settlement from offset savings | Non-deductible |
The deciding factor was policy. At the time of this application, NAB allowed a director's salary from their own business to be relied on when annualised over six months, with no minimum period for the business ABN, as long as the salary could be evidenced through the ATO for more than six months. Other lenders with a similar policy required the ABN to have been active for at least 18 months.
| Metric | Figure |
|---|---|
| Lender | NAB |
| Total lending | $1,730,000 |
| LVR | 69.2% |
| Loan term | 30 years |
| Non-deductible home loan | $1,155,000 at 5.54% variable |
| Deductible investment split | $575,000 at 5.94%, interest only |
| Income relied on | $400,000 director's salary, annualised over six months |
| Business ABN active since | May 2024 |
| Account fees | $8 ongoing account service fee, no annual fee |
Assuming all of the shares are held in the director's name, the interest on the $575,000 split could be deductible against his income. At 5.94% interest only, that is $34,155 in year one. On the top marginal rate (45% plus the 2% Medicare levy), the anticipated saving is $16,053 a year, which brings the after-tax cost of the investment debt from 5.94% to 3.15%.
| Figure | |
|---|---|
| Annual interest on $575,000 at 5.94% | $34,155.00 |
| Marginal tax rate (45% plus Medicare levy) | 47% |
| Anticipated tax saving, per annum | $16,052.85 |
| Anticipated tax saving, per month | $1,337.74 |
| Interest cost after tax, per annum | $18,102.15 |
| Effective interest rate after tax | 3.15% |
*Anticipated figures for year one on the stated assumptions, subject to confirmation by the clients' accountant. We are not tax agents.
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1. Arranged a loan when our small business situation made it difficult to qualify.
2. Met requirements to have funding available by a specified date.
3. Understood my needs to setup debt recycling to allow tax structuring.
4. Communicated well throughout.
I would use their services again.
Alex, Jess and the Kingfisher team were second to none and their process from start to finish was faultless. As a self-employed business owner, it can be difficult to obtain finance at the best of times. The Kingfisher team made this an easy and efficient proposition and their continued transparent and efficient communication ensured we were kept up to date at all times. Highly recommend them for your finance needs!
Alex and Jess dealt with our investment loan and provided a top tier service. They kept us up to date and communicated every step of the process making it a seamless and smooth experience! Awesome work team we will definitely be back for future loans!
Jess from Kingfisher was outstanding. I couldn't fault her communication, expertise or dedication to finding the best loan for our situation. The entire process was seamless from start to finish. We'll definitely be using Kingfisher again in the future. A top-tier organisation.
