Loan recommendation for my 1st IP?

Hi,

I'm looking towards my first IP shortly (Brisbane based). I'm looking to go variable rate and ensure I have the ability to pay off the loan faster (probably around $170k loan).

Q1 - Any recommendations at the moment on which lender(s) to look at?

Q2 - What about package types? I read a thread which spoke about the ANZ Break Free account. Are there specialised account packages that are good for property investors I should be aware of?

Thanks

mixedup said:

I'm looking towards my first IP shortly (Brisbane based). I'm looking to go variable rate and ensure I have the ability to pay off the loan faster (probably around $170k loan).

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MU, what would be your reasoning behind paying off the loan faster? What is your opinion on putting the money into an offset account and then using that money, eventually, to buy another property? Don't be too concerned about paying off debts especially at this early stage.
Alex

these might look like similar words I used on a another recent post

I was considering for me the main blocker to moving on to purchase my 2nd IP would be reducing the amount I have to service on the loan for my 1st IP (i.e. get the DSR down). So wouldn't this imply it's a good thing to pay off a bit of my 1st IP loan fast to lessen the annual loss, until it lessens the loan repayment burdon enough so we can then buy the 2nd IP. It seems to me our ability to meet the loan repayment shortfall after Rent/Negative Gearing benefit is key?

At the end of the day with around around a $280k loan (and I'll only be able to put in about 10% myself, I'll draw down on my PPOR loan for the full 20% to avoid Mortgage Insurance), there's a reasonable amount of $$ we'll have to be paying to service the loan.

If I'm missing something I'd be happy to know

I have just purchased a IP.

I went with www.homepath.com.au they have excellent rates, and are owned by CBA.

I'm going interest only, but dumping as much month each month as I can into it. Then I can redraw the funds down the track. This can be used for another IP, shares etc. But be careful as redraw money for non-deductible purposes will screw up your loan for tax purposes.

Hiya

much depends on the overall scenario, but in many cases avoding mortgage insurance is often NOT smart.

It might save money ( borrowed money) and therefore reduce your payments a wee bit, but often that extra 10 to 15 % parked in an offset is a great risk manager .

ta
rolf

Rolf Latham said:

but often that extra 10 to 15 % parked in an offset is a great risk manager

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Rolf, mind if I ask what you meant by this? I'm assuming that I'll be able to claim the interest on the PPOR redraw as a tax benefit (I rang ATO and confirmed this).

Hiya

Lets say you get in JUST, with an 80 % lend and u have 1000 in the bank after the deal.

Now u lose ur income for 3 mths or there is a big maintenance bill, or the tennant doesnt pay for 4 weeks and u have a slack PM...........now you are in a position where you need to borrow more money, when with the 90 or 95 % scenario, you have these things and many others covered.

LMI isnt often a nasty thing, it can be your best friend.

ta
rolf

ok - so think of it as a bit of an insurance policy (buffer) in one sense in this case then