I have lived overseas for the past 10 years and have 2 investment properties. I owe $150,000 on one property that I will continue to rent out at $350.00 per week and another property that I will move into when I return from overseas in 3 months time that I owe $190,000 dollars on. I have flexi plus mortgages on both properties. I have $100,000 in the bank and have been aggressively paying down both properties whilst overseas. I would like to know which type of mortgage I should shift to when I return to reduce my payments. Both loans were based on an initial $280,000 borrowing and both properties are valued at $400,000.
Ideally, you want to have a linked offset and save all your funds in there instead of paying the mortgage down. Also sounds like you are cross securitised so you may want to fix that up. The flexi loans are @ 5.12% so you should definitely get your banker or broker to do the funds as there are plenty of lenders that will give you less than 5% on variable and rebates for refinances.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
As Shahin mentioned, the property you are going to live in should have the loan linked to an offset account in which to place your funds. In addition the continuing investment property should be an interest only loan. That way you will maximise your deductibility.
Depending on what you also intend to with the property you move into, it might be worthwhile having that interest only as well. A decent broker can help you out.
Cheers
Tom
Thank you both for your advice, I would be interested in refinancing as suggested. Please feel free to contact me on [email protected] to discuss what can be done to maximize my position.
Thanks Tom good advice. I have not had good advice while I have been overseas regarding mortgages and need to get my house in order before I rerun to Australia.
Hi J
Welcome aboard.
The right structure comes down to your long term plans. If you were my client – I would have discussed setting up everything as interest only and parking your spare cash in an offset attached to one of the properties. I also would have avoiding crossing up the properties.
Given that you've got two loans with WBC – I'd more than likely have you set up with the prem advantage so you can take advantage of a rate discount and offset account.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
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