Borrowing power for renting out PPOR and buying new place to live
I am living in a townhouse north of Brisbane worth ~$850k, with a $350k mortgage.
I’m done with suburban life and want to get a unit in an inner city suburb, which will be ~$850-950k.
I have called my bank to see what my options are to take some equity out of my house to by a new PPOR and refinance to an investment loan to rent out the townhouse for $600 per week.
They were slightly vague and said my purchase price would be ~$590k and I was under the impression that factored in the equity of my home.
With 80% of the equity as “usable”, I thought that allow me to tap into around $400k to use towards a new place and borrow the rest.
I’m single and earn $160k+, so I’m confused as to why my borrowing power would be so low for an additional property, particularly when the ‘gap’ between the equity of the existing home and a new place would only be an additional $500k.
Am I way out of touch, or could the bank have miscommunicated the amount vs purchase price I would be eligible to borrow?