scrap that last comment – i just realised i'd be paying non-deductible interest on $40K either way! 

I was also just doing some further calcs was thinking…even though we will pay $2000 more LMI if we keep the first loan at 80% LVR and have the second at 90%, when or if we eventually move into the 2nd IP and make it our PPOR, the interest on the LOC we used for the deposit is no longer tax deductible and therefore we would be only paying…[Read more]

Richard, what do you mean when you said: "If you stay with the 1 lender and amount is over $500K"we are planning to have the 2 loans with the same lender which would make our total borrowings appx $730K. will this increase the LMI??

Ok, i'm aiming for the buy and hold strategy too so thats why i'm looking at this prop – it is 10Km from the brisbane CBD so i think we will get some good cap growth out of it in years to come – not to mention a good rental yield.So we went to an inspection today for a unit in our current IP's building complex, asking for offers over $415K (it is…[Read more]

Ok, I understand what your saying S/C – clever thinking. i really appreciate your time and energy helping me out!So theoretically, it doesnt really matter if we buy now or buy in 3 years time – the main difference is that the whole process will be less risky if we wait. But thats looking purely at loan amount…The main driving force of buying…[Read more]

oh ok, so if thats the case Richard, and we get a separate loan, will we still be able to borrow that amount or will it reduce our borrowing power?

Thanks StumpCam, so do you feel the same way about not not using a LOC and just paying the LMI in order to get into the market sooner? ie keep appx 75% LVR on first IP and 96% LVR (inc LMI) (93% pre LMI) on second IP?The after tax figures look pretty good though even inc $24,000 LMI- appx $8000/yr which we can afford. So in this case, wouldnt it…[Read more]

yeah that makes sense. Thanks for the advice Terry!  just another annoying question would use suggest choosing a variable rate loan with an offset account over a fixed rate without an offset for a PPOR mortgage? i suppose it would depend on the amount of extra funds we plan to put into the account opposed to the extra interest we will be charged i…[Read more]

ok, i think i understand. Our first IP has an IO loan with an offset account which we have been putting all our savings into – so we're on the right track there Our next IP will most likely be a IO fixed rate mortgage (most likely without an offset account since these are rare). i will definetly look into setting up a LOC with the first IP's m…[Read more]

Hi Terry,I have considered that as well but how will we go about using the equity to reduce the amount of the mortgage? is that what re-financing is for? sorry, im a bit of a newbie!

I just had another lightbulb moment- i keep reading about trusts:could we establish a trust, borrow money in the trusts name to buy the IP from us and then put the profit towards the PPOR?would this suit our situation? Would we have to buy the property in certain names?cheers!

Ok thanks guys, i thought so! She is also considering building a 'live-in garage/granny flat' in the back yard with it own street entry to rent out. 1. am i correct in saying that the interest on the money she borrows to build the flat will be tax deductible because its an investment? 2. she also thought about subdividing the the property in order…[Read more]

Yes, the NSW office of state revenue can confirm that if you email them.

Thanks everyone! I think we will end up having to put the funds in a term deposit account. We should probably hit the book shops this weekend too! Actually imugli, i made some enquiries with the NSW office of state revenue before we purchased the unit and apparently, if we never reside in the investment property, we are still eligible for the FHOG…[Read more]

thanks for all your comments and advice!Im new at this so my knowledge is fairly basic! i guess our plan and strategy was to get into the property market while it was a good time to buy as well as reduce our taxable income (my husband is in the 40% margin and im in the 30%). We ended up buying a unit instead of waiting until we could afford to by…[Read more]

thanks Imugli, I realise now that we should have chosen a loan with the option of an off set account but unfortunetly it doesnt come with the fixed rate loan so until it changes to a variable rate in 2 years time, what should we do with the extra funds?? I also realise that we should have gone with a variable rate from the start too! Hind sight…[Read more]