In establishing lines of finance for purchases is it preferable to fix the interest rate or keep the rate lower and float? If lower and rates rise then the ability to recoup the extra costs must be market driven and therefore not assured. In times of rising interest rates there must be a risk that some +CF properties will move into the -VE terrritory.
Hi Malcolm,
This is a decision really up by you, depends, what you are doing, for example, if your plan is to sell the property, in a years time or so, then you would be better to use an I/O loan, as your intentions are not to pay down the principal amount, but in the hope of making quick capital gains.
Depending on how once again, you structure your loans, if you did not structure them correctly, it is possible that many of your +ve cashflow properties, will be either pushed into neutral geraing or negative gearing results.
There are packages out there, that can further reduce your interest, and further reduce it by .25% and more but also give yourself more margin to play with.
If you are worried, then you should create a margin of at least 2% to make sure you can cover your loan repayments.
cheers,
s.i.sHi Malcolm,
This is a decision really up by you, depends, what you are doing, for example, if your plan is to sell the property, in a years time or so, then you would be better to use an I/O loan, as your intentions are not to pay down the principal amount, but in the hope of making quick capital gains.
Depending on how once again, you structure your loans, if you did not structure them correctly, it is possible that many of your +ve cashflow properties, will be either pushed into neutral geraing or negative gearing results.
There are packages out there, that can further reduce your interest, and further reduce it by .25% and more but also give yourself more margin to play with.
If you are worried, then you should create a margin of at least 2% to make sure you can cover your loan repayments.
cheers,
s.i.s
You must be logged in to reply to this topic. If you don't have an account, you can register here.
