I'm applying an interest-only IHL from ANZ and was told that they can only do 5 years IO, then I'll have to reapply for another 5 years IO, and the maximum period for IO is 10 years. I know 5 years is a long time, but I'd rather go without the hassle.
I can get a LOC (Equity Manager) with +0.1% rate, which can run forever. However I understand it could be messy in terms of interest deductibility, so I'd rather avoid it if I can. However, I don't have to worry about renewing/refinancing it every 5 years, as long as any withdraws are strictly for investment only.
Any suggestions as to which way you'd rather use?
Thanks,
DonYou can get a L.O.C with more than one sub-account.
The day-to-day use is in one, and all rent, personal income and expenses for both property and personal get paid from here (it is a good idea to have your property manager pay all I.P expenses on you behalf from the rent, and send you the invoices with your statements).
We actually live off the credit card, and pay the whole balance every month via internet transfer from this account. This minimises interest and racks up frequent flyer points.
The investment loan interest is in another sub-account. The only time this account is used is for more investment if there are enough funds available.
The interest on the investment loan account is paid from the day-to-day account and can be set up to be transferred automatically every month.
There is a separate statement for each account.
This makes accounting for the purpose of each loan easy for the tax returns.
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