Hey everyone, I am fairly new to the property game (as my username suggests) and was seeking some advice from those in-the-know. I have been reading several books and magazines and have only managed to further confuse myself. My situation so far –I currently have one property that I bought 18 months ago (just missed the property boom in Perth). It’s a 2 X 1 villa that I bought with the first home buyers grant. I estimate that I have around $30,000 in equity. I am paying principal and interest on a 30 year loan with ING bank. Everything was nice and simple until I found work up north (about 3 hours drive north of Perth). I now find myself looking at another Property. I am going to rent my villa in Perth and purchase another property up north. Shall I change my loan on the villa from principal & interest to interest only? Or if I can afford it shall I leave it as it is? I will probably be in the new property for between 2-3 years with the intention of holding onto it and renting it out when we move back to Perth. Shall I get the new loan on interest only? Is there any point to paying interest only if you’re not going to do anything with the extra money in your pocket each month? My partner will be on a country income of $60,000 and I will be on $100,000. While we are working remote, shall we use this extra income to hammer repayments on both properties or will it hurt my negative gearing in the future?
LC
My suggestion would to switch the loan to IO immediately and link it to 100% offset account (Not sure if you can get this from ING though).
Have your salaries paid into the offset account to reduce the interest deficit.
Even if you move back into the property I would still have suggested an IO loan as this gives you plenty of flexibility.
Richard Taylor | Australia's leading private lender
Thanks Richard,
I'll look into it.
I don't think ING does provide LOC…
Might be in the future… ?Sept/Oct 2008 as initial suggested by INGBank
Any idea from anyone?ING do not have offset, but they do provide Line of Credit.
If you buy a property up north (rather than rent), change your current ING laon to just I/O, and the new property purchase, structure the laon so that is does have offset account and deposit your incomes in the offset, and have direct debits come from that offset to make repayments on both Loans.I can only give positive comments on westpac who do both line of credit AND offset,you can have seperate mortgages for each property with the same bank. i suggest interest only payments on your investment property to keep the negative gearing as your tax bill will already be 30%plus on combined income of 160k. And pile all your earnings into your offset to keep the (bad) debt down
ANDY (also in Perth) originally Yorkshire!
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