Forum Replies Created
Great advice in this thread – thanks everyone who's taken time to respond. Learned more in 24 hours than ever before in my life!
Terry – very clear – thanks for taking the time to explain. Offset it is!
Thanks Terry – could you explain why a redraw is different to a offset?
Both my bank and my accountant have said they have basically the same effect?
It is because a redraw changes the actual interest charged (that is therefore deductible) whereas an offset doesn't? Or is that completely wrong?
I am confused about this too and had the same question.
My accountant has recommended IO to me for my currently property, soon to become my investment. I understand why – but what I don't understand it, how do you ever pay it off then?
I had planned to pay it off so that when I retire it will be an income stream.I have seen advice on here that says have a redraw or offset so that you can pay it off by paying the principle equivalent payments without actually reducing the interest, then presumable if you ever do have enough in the redraw/offset you can just pay it off, getting the same result. Maybe the person that posted this advice (James?) might comment?
Thanks Richard, I appreciate the advice.
Yes, I can see that a planned out strategy would be preferable in every way!
I am not sure what, if anything, I can do to improve the situation now – I certainly don't want to be signing up to a loan that isn't the best one for my circumstances, so I will ask the Bank if there is another way and explore other options.
Thank you
Rachel
