He owned three properties and assumed that gave him freedom. It didn’t.
When he’d bought the second and the third, his bank had made it easy: used the equity in what he already owned as security for each new loan, all under the one roof. No deposit to scrape together, one point of contact, minimal paperwork. It felt like the path of least resistance, so he took it.
What he didn’t realise is that all three were now tied together. Cross-collateralised… meaning every property was security for every loan.
The problem surfaced when he wanted to sell one. He’d had a good run on it and wanted to free up some cash. But because the properties were linked, the bank got a say in where the sale proceeds went and reassessed the whole structure before letting anything move.
A soft valuation on one of the others tightened the entire position. He couldn’t simply sell one and walk away clean. Every decision now ran through one lender, on their terms.
Untangling it later was possible, but it took work, time and cost he hadn’t budgeted for.
The fix is rarely complicated at the start. Structured as standalone loans (with each property securing its own debt), every move stays independent.
Sell one, refinance one, access equity in one, without the other two getting dragged into it.
Borrowing capacity is only half the picture. The other half is whether you can actually act when you need to.
If you’ve got more than one property and you’re not sure how yours is set up, check the security section of your loan contracts; more than one property listed against a loan is the tell. And if it’s worth a proper look, that’s a conversation I’m glad to have.
My Mortgage Concierge is licensed under ACL 392736 Sattout Accounting Services Pty Ltd. General information only — seek personal advice before acting.
