Loan Information?

I suggest you do some searches as this has been discussed many times before.

Sphisticated investors tend to choose the IO model as it allows more cashflow and flexibility. Even with IO you can make principal repayments if you choose. These are most effectively directed into an offset account rather than off the loan.

Similarly many people choose var loans unless there is strong indications of multiple rate hikes pending. Anectodately I hear that with fixed rates the only advantage gained is some peace of mind for those that need it. Typically most borrowers end up paying more for the privilege of fixing. Few actually pick it well and pay substantially less.

Do you have any questions from all that?

Cheers,

Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Equity is built in two ways.

Firstly by growth in the intrinsic value of the asset due to inflation.

Secondly with your savings. And rather than putting it into PI loan I suggest keeping it in an offset account – this lets you use it as you wish and not compromise the deductibility of the loan.

I refer to sophisticated investors as those who are experienced and have been in the business for a while. They generally see cashflow as being more important than reducing the loan.

Remember it isn’t the size of the debt that is important – It is the cost of the debt that matters.

Cheers,

Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.