Case Study

Create Wealth

Make debt work for you - you can start investing now!

Many people wait until their home loan is repaid before they start to invest. Unfortunately, the longer you wait to invest, the less time you leave for your investments to grow. Start investing now with NAB Portfolio Facility and still pay off your residential home loan, without stretching yourself financially.

The process is simple:

• Use the equity in your home to borrow for investment at a level you feel comfortable.
• Use income from your investments to reduce the balance of your home loan.
• At the end of each year, redraw the amount you have paid off your home loan and increase your investment portfolio.

This cycle will continue to push your home loan down while increasing your assets and net worth.

Case Study

See how NAB Portfolio Facility has worked for others - here's an example of how it has helped one couple build wealth.

James and Sarah own a house worth $625,000. They want to consolidate their housing, credit card, and car loan debts of $375,000 under a NAB Portfolio Facility, and they would like to start building their wealth. With their NAB Portfolio Facility, James and Sarah are able to consolidate their debts using home loan rates.

Their NAB Portfolio Facility has a limit of $500,000, which is 80% of the value of their home. They create two sub accounts for their salaries and for the money they put aside, which are both 100% offset against their home loan, saving the couple substantial interest. James and Sarah cleverly use their two NAB Credit cards for all their day to day living expenses, paying the outstanding credit card balance within the interest free period, to maximise their offset benefit.

After receiving investment advice from a financial planner, they decide to unlock some of their $125,000 in available equity to build wealth, so they put $50,000 towards managed funds and $40,000 towards direct shares, which can provide James and Sarah with additional income. They have $35,000 of funds remaining and decide to allocate $20,000 for future renovations and $15,000 for their children’s education fees.

Over time, James and Sarah further reduce their home loan debt and continue to build their investment portfolio, gradually replacing their personal debt with debt that generates income. This is an important process in wealth creation.

If you would like to find out more about NAB Portfolio Facility, please speak to your NAB banker or call 13 13 12 and choose the Investment Loans option (between 7am - 9pm EST, Monday – Friday or 8am – 9pm, Saturday – Sunday) or you can apply online now.