PPOR offset full - now what?

My offset has almost reached the balance of my PPOR loan ($180k). I'm pretty sure that once it surpasses the loan the bank won't be paying ME any interest! ie. any surplus will be earning 0%.

I do realise it's a bit of a "happy problem" but this creates a couple of annoyances:

1. The principle is now going down at an alarming rate! I want to keep it high for the option of turning the PPOR into an IP later.

2. As the daily transaction account the offset fluctuates wildly and I'm facing the prospect of manually micromanaging it to keep it on par with the loan.

For various reasons I need the contingency funds handy so the standard answer of "buy another IP" won't work for me just now

Any ideas for a clean solution?

1. Convert the loan to interest only (will prevent principal from reducing)
2. Use another account as everyday transactional account.

Jason

as already mentioned ... convert the loan to interest only

start parking extra funds against an offset attached to an IP

Good situation to be in

If you have a spouse/partner who is nonworking you could consider placing some of it into a high earning account in their name.

Thanks for the responses... I will approach the bank about converting to IO. If this can be done at little cost it will help a lot.

With a little ecosystem of salaries, credit cards, medicare and other things all feeding into and out of the offset it's going to be a royal pain to change all of those to another account

I wish a clever-thinking bank would offer virtual account numbers that you could then map to whichever real account you desired. Would make things like this insanely easy.

jrc77 said:

1. Convert the loan to interest only (will prevent principal from reducing)
2. Use another account as everyday transactional account.

Jason

Click to expand...

You said it Jason.

This should solve the prob.

No worries about converting to Interest Only with that amount of equity. (LVR)

Regards JO

softmonkey said:

I wish a clever-thinking bank would offer virtual account numbers that you could then map to whichever real account you desired. Would make things like this insanely easy.

Click to expand...

Just setup a recurring payment each payday from your offset account into another account of your choice. Problem solved!

The bank said they will convert the PPOR loan to IO for a one-off fee of $350 and a display of latest payslips. Offset, interest rate et all remain as-is.

The recurring payment idea won't work because the amount to transfer would vary wildly. I don't think I'll be able to avoid micromanaging the account every couple of weeks. Come to think of it I probably should be checking in on it this regularly anyway.

Thanks for the suggestions.