Not necessarily. Some people take comfort in paying down debt. Personally, if it were me – I'd keep everything IO and pop an offset against one of the loans. All of my spare cash/income would get paid into that offset. It provides me with greater control and maximum flexibility.

It's important that you're disciplined with money when it comes to this structure though. Otherwise you might simply make the minimum IO repayments and not put any money in your offset. If that was to be the case, then P&I can be a better option because it's a forced method of savings in a way.

Hope that makes sense.

Cheers

Jamie

Hi Kylie

It seems to be heating up a bit now. My understanding from dealing with clients buying in the area and talking to other professionals on the ground is that there's a lack of quality stock on the market – so the supply isn't meeting the demand.

Cheers

Jamie

No doesn't work like that. That would only apply in repayment defaults – different situation completely.

normally try and extend the IO term with current lender or refinance to another.

Nope – I don't.

Some people do. There's usually a few main reasons. Firstly, they're unaware that their finances can be structured in a better way. Secondly, there's a mental barrier (sometimes an older school way of thinking) that all debt is bad and must be paid down as soon as possible. Lastly – they might not have any personal debt and are in a position to start paying down investment debt.

Cheers

Jamie 

I would. The $95 is a pain but the longer term benefits of a transactional offset will outweigh the upfront costs.

Are you utilising the MISA a fair bit at the moment?

You can arrange to have your salary and other income paid into the new offset – and withdraw cash for expenses.

Cheers

Jamie

Hi Will

Is there any chance you may purchase another owner occupied property in the future? If so, will you need to take out a loan for it? If so, then interest only on all loans with an offset linked to one would be more ideal structure. If there's no chance of purchasing another owner occupied property in the future then paying down your IP loans isn't necessarily a bad thing – unless cashflow is an issue.

You only need one offset account set up.

Cheers

Jamie

Hi Willis

Without knowing too much of the finer details – having all IP loans set up as P&I normally means that there's room for some improvement with your current structure.

Do you have non-deductible debt such as an owner occupied mortgage? If so, you want to knock that debt on the head first – before paying down deductible debt.

Generally speaking  – when refinancing to IO, I normally look to use your existing lender first – that will save on any refi costs.

p.s – a lot of brokers don't charge a fee, most of us are remunerated from the lender via an upfront and trailing commission for arranging your loan – and this doesn't mean that you pay more for your loan.

Cheers

Jamie

Yes! I'm glad I'm not the only one. I was speaking with my BDM the other day about how ridiculous that platform is. Do you use podium to lodge most of your deals? 

Cheers

Jamie

Hi TIA

Welcome aboard

You could potentially do both.

Use the funds to renovate the property – and then have it revalued afterwards. Hopefully it's gone up in value – you then access that newly created equity which can be used to kick off your property investing.

Finance structure is key here – so consult an expert before proceeding.

Cheers

Jamie