Hello,
I have 2 loans 70k and 130k same bank same rate. does it matter which i pay off first? Which is the cheapest way to pay these off? I was thinking of getting rid of the 70k loan first. then i would have less monthly fees.I legally have no investment properties for taxable purposes.
I can pay about 600/weekAlso is there a way to make deductions on my income some how to lower my taxable income with no investment properties?
Also when do i buy another house? Realistically rental returns are only around the 80% mark. So baseing that.
70k loan is for a 120 valued house- returns $120
130k is for a 183 house- returns $100 live in it as well
When would i be over my headaaron
Post slightly confusing to say the least but we can try and help.
legally have no investment properties for taxable purposes.
Yet 70k loan is for a 120 valued house- returns $120
How you can have no IP but have one house renting for $120 (i assume a week).
If you purchase a new house would you keep your old PPOR and rent it out. If so why not look at selling the property to a Trust (copping the Stamp Duty and possible CGT) and using the full amount of finance to pay for the new PPOR and claim a full tax deduction on the rental and have no loan on your new PPOR.
That would save on any selling costs as well as giving you some tax deductions.
Difficult to advise you when to purchase another property as there are a few points above which need clarification. In saying all of this always pay off loans where the interest in not tax deductible.
If you want to give us more information we can make a more valued response.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.19%**
Licensed Financial Planner
http://www.yourstatefinance.com
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Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
Idon’t think it would matter which loan you paid extra into, the overall interest would be the same either way. But if each loan has fees, then it would be good to pay one off quicker, and the smaller one would be easier to pay off in this case.
If you have 2 loans and no investment properties, i assume that both are for your home. If one loan has been used for business or other investments, then it would be better to leave this one IO, and pay off the home loan first – increasing your tax deductions.
Terryw
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hi aaronwhittaker2003
couple of things
1.not sure about the guru it as I haven’t seen one for a while, last one I saw was riding a unicorn. but will give a couple of suggestions.
first get a off set account and pay into that you can get 1 for each account the follow the advice with regard to the ppor.
second not sure why you would post on a open bulliten board for half the planet to see( africa has very limited access to the net)
with I don’t have investment properties for tax purposes sorry but you do or you don’t and tax is not the main reason for that structure nor should it be.
if you are using a trust structure then again its for a investment reason not for tax reason have a chat with your account and he will tell you why you change your idea’s on this point it is very important.
when will you be over your head this I can’t answer because i don’t know your risk profile we arte all different if I did post my over my head position you would have a heart attack on my behalf but for me I’m not over my head yet.
may not have answered your question just given a few pointers.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]i will explain further to get rid of the confussion.
I refinanced a loan and used this as a deposit on a new place to live in. My accountant said because i was using this money to buy a place to live in; even though it was secured against an investment property; it is what it is borrowed for that counts for tax. If i tried to claim this, the ATO would search to see if any stamp duty had been paid on this property. If it hadn’t i would be in trouble with the taxman if i tried to claim this.
Is this correct?vyaw
Ok thanks for the slight clarification.
If both are non tax dedeductible why not combine the loans into 1 and negotiate a better interest rate. A 0.5% saving would save you $1000 PA off the interest and would reduce the term of the loans no end.
Establish a 100% offset and link this to the loan and divert all of your funds into this account.
An alternative subject to the Stamp Duty and CGT considerations why not sell one of the IP’s to a Trust and borrow the full $200K and then repay the entire non tax deductible debt and have the full $200K interest as a claimable expense.
Richard Taylor
Residential & Commercial Finance Broker
**Lodoc Commercial loans from 7.19%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
what is a trust? where can i get info on this?
the loans are seen as one, i borrowed over a total of $150k so i got the good interest rate. Keeping them seperate wont have any effect, unless you mean i will save on a monthly rate. If i do that i would have 2 properties secured against 1 loan. I dont want that. if i pay one off first i can buy another house, but the if there is one loan way i am locked in to a certain degree.
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