How would I work this out…
If my brother was to put 100k into my offset account for 6 months. And my mortgatge is interest only , and is 452k.
my interest rate is variable with westpac (7.76).
How much money and time would this save me off my mortgage. ? If I was to pay interest to my brother at say 5% would it be worth if for me…?Thanks
Mark452k * 7.76% = $35075 interest p/a
352k * 7.76% = $27315 interest p/a
saving of 7760 paying 5000 to brother save $2760 (this is over one year half the amounts for 6 months).
Now the 5% payment to brother is that going to be claimed as an investment cost with ATO which your brother would have to claim as an income to ATO.
If you have an investment with this mortgage any saving will decrease your expenses and thus increase your investment income.
This will then reduce your negative gearing or increase your investment's taxable income.
Also when you ask how much time will be saved the answer is zero.
Why because you are paying interest only.As an example of how you could save money with p & I loan
Based on a 30 year Pi loan at 7.76% payment date of 10/10/2038 repayment of $3241 a monthnow with a saving of 1380 from brother
Based on a 30 year Pi loan at 7.76% payment date of 10/06/2038 repayment of $3241 a month
4 month saving over thirty years $12720 .
You really only save if you are paying down the principal regularly and getting a compounding effect over a long period of time.thank you very much duckster…
Thats very helpful… never realised it was so easy to work out. doh.
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