Ok, decision time – final pleas for advice..!

Hi,

I’ve been working with Mortgagehunter to arrange a mortgage for our unit purchase, the good news is he has done a great job and found a couple of options (keeping in mind we had difficult circumstances).

We now have to decide whether to choose:

1) P&I, offset, professional package.
2) IO, no offset, basic variable.

Both same rate (6.72).

Its a shame we couldn’t get a IO offset, that would be the ideal choice, but we are limited due to our circumstances.

My questions are around what is the recommended option, both have pros and cons. The P&I mortgage repayment is about $400/month more than the IO, which is not huge but a nice saving (and we are planning to save for a family, touch wood). We can pay extra in and re-draw, but am I right in thinking paying extra in to the IO with no offser wont make a difference to our repayment? So what is the benefit of paying extra into an IO with no offset?

Re the P&I loan, the payment is more per month, but this has an offset. Not sure if we can pay the loan amount and save much more than that, so the offset may not be utilised as best as it could, but I like the other perks of the proff. package.

So, we need to make a decision, I’m erring to the IO loan, where we can pay more into it (but not sure of the benefit as it is IO), and the $400 / month saving may come in handy towards our savings plan. Note: we MAY rent out or sell the unit after
12 months ( as we will hopefully need a bigger place).

I want to thank Mortgagehunter for his straightforward advice and assistance, using him (and the rest of the forum contributers) has made the whole process a lot smoother and less stressful – thanks Simon.

Anyway, we are not in a huge rush, but I would like to get this sorted and off my mind quickly, so I would appreciate any advice. If I need to tell you any more info please ask.