A summary of my current situation…have PPOR worth about $400k with about $370k owing on P&I home loan. Have about about $20k in offset…really want to get an IP (have put it off due to the fact only had PPOR for a few years and loan amount is substantial) but then it will never happen right?
But want to get advice on possible loan options how ways to approach it….
Can afford to payback a loan of approx $220k (this is with approx rental return calculator in) ….so essentially a $200k investment property. Some possible options i see:
* Wait longer, save for a bigger deposit, will take abit of time….
* Use equity in PPOR for new IP loan (i dont think value has risen much so maybe not an option)
* Utilise offset funds towards IP (but will leave no spare cash funds)
* little to zero deposit loan for IP
* Combination of the above?
* Other?Move into rental accommodation, rent out your ppor for a couple of years, claim the interest & other expenses (better than it coming out of your pocket).
Don't use offset funds to pay for an investment – this will make the interest on your non-deductible home loan go up and reduce the size of your investment loan = more tax. Better to pay your home loan down first and then set up a new loan against this. All loans should be IO too, generally.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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