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Thanks for the replies, I’ve started looking at the other major lenders (presuming ANZ, Westpac etc?). I have found that Westpac has a “Rocket Investment Loan” that has an offset account and a 0.7% discount when you get their package, which works out to be $0 application fee, $33 per month, rate of 7.51-0.7=6.81% (making BW or Homeside a better deal). I can’t find the applicable ANZ discounted rate loan.
With regards to homeside, I think what threw me was that they refer to the lower rates as a “Promotional Interest Rate” – is this something that is likely to be withdrawn at any time, or is this the standard rate for all of their loans (disregarding official rate rises)?
Terryw wrote:zeph34 wrote:If I get an IO loan, and pay only interest, but put the extra part of the repayments into the offset account, the end repayments would be the same (obviously they would drop considerably if I put more than just the "standard" repayments into the offset)?This would be correct in terms of interest payable – in Theory. You will end up with large sums of cash in your offset and what happens is that many people go out and spend it, when otherwise they wouldn:t. So you need to be disciplined or it could be worse off in the end.
Thanks for the response Terry, good to know that I’m thinking along the correct paths.
This is interesting, because it’s almost word for word my situation (live with parents, 280k house, 60k deposit, first home/ip etc). I have decided that I will be getting a loan with an offset account, but I’m planning on holding back a bit more of the deposit (about 20k) and getting a slightly larger loan, and then sinking the excess money straight into the offset account.I will have to pay a bit of LMI, but I think I’d prefer the flexibility, if I have troubles paying the h/l, or I see another investment property and need a deposit.
The only things I have to get my head around now are the differences between IO vs P&I loans, and the CGT and living in the property for 6 months etc.
Am I understanding the above post correctly: If I get an IO loan, and pay only interest, but put the extra part of the repayments into the offset account, the end repayments would be the same (obviously they would drop considerably if I put more than just the “standard” repayments into the offset)?
