OK, we are looking at the CBA offering – wealth package plus MISA account for offset.

Now, the question is PI or IO.

The way interest only was explained to me is that the interest is calculated at the beginning of the loan, and regardless of offset will remain the same. To me thats just madness, or wrong.

Example:

I take out an IO loan for $100,000 @ 5% interest. The interest is $417 a month.
Now if I have a MISA account linked to this IO account with $50,000, I still have to pay $417 a month.

That is how it was explained to me, if this is true, IO is no good for me because like many, I want to reduce the interest I'm paying. Remember I have no non deductible debt, so this debt is the next best thing to pay off.

Ive got some funds I can use, so I don't necessarily need 100% IVR.

So the trust needs to be setup before the settlement contract or the mortgage contract?

Property will be negatively geared until of course I pay enough principal. Purchasing the property in joint name, my wife and I.

Thank you.

I was thinking of an interest only account with 100% offset for the IP loan.

I'd like to find a positively geared property, and if so, will put it under my wife's name, as she is a stay at home mum.