How does one calculate the monthly repayment for a IO loan? I have a mortgage calculator but dont know how to use it for IO.

When i am using a IO loan, isnt it considered “wasted” as those interest paid over the years didnt reduce the loan at all? I know it gives us more cashflow on one hand, but we have to calculate the interest paid to the bank…[Read more]

Michael,

i will be loaning 74700. I can get the P&I loan for 6% for 30 yrs, (monthly repayment = $447.86).
<how do i know how much interest or principle i pay per year?>

If i use a Interest Only loan, then it will be 6.11% at 30 years. ( i dont know how to calculate how much repayment is for IO loan).

Details:
Purchase Price : 83,000
Loan :…[Read more]

also Derynaka,

why does a IO loan frees up more cashflow?
ALthough we dont pay principle on it, we still pay about the same amount dont we? And usually the interest loan is higher in % than PI loan.
give me an example based on my property figure pls.
THank you

Derynaka,

hi thanks.
Well, the loan application only cost me $400, and there’s no valuation fee nor monthly fee for it. Also, the stamp duty was only about $1000+ from what my finance broker calculated for me.

So you still think its better for me to get a Interest Only loan huh?
What about when i get positive rental income, is that taxable? How…[Read more]

Try buying the “Australian property Investor” magazine which gives u the median price of all postcodes each issue.
Usually, if it is less than $150,000 your chances of getting a positive cash flow is pretty high.
For rents of $120pw, then the property should not exceed $80,000-$90,000.

For $150,000 house, i would guess the rent should be more…[Read more]