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  1. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    Thanks Mick. Good food for thought. I'm aiming to accelerate my acquisition of assets now (ready for IP#1), and in the future. Exploring the break scenario is to potentially 1) Increase serviceability 2) Increase borrowing capacity 3) Reduce PPOR debt to zero within a decade. Keeping...
  2. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    It's generating cashflow. Now. And I still live there.
  3. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    Thanks mate. 1) Been considering this for some time. One hitch. It's now grown into a great source of income (airbnb) so turning into an IP has lost a significant amount of its (financial) appeal. 2) Yes, increasing my asset base is priority #1. Paying the PPOR off is not an immediate...
  4. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    Please, continue to play devil's advocate. It's really helpful. If variable rates increase (no doubt they will, given time) this 6.5 year figure may protract. BUT... One reason 5 year fixes are appealing is that, given I'll be able to offset/pay extra with my proposed structure, I project...
  5. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    Cheers Alex. No, it's not necessary to fix now. I'm viewing this through a longterm lens though. I've considered remaining fixed and breaking down the track when a) principal is lower and b) interest rates, probably, are higher thus break cost lower. I imagine I could be waiting 2-3+...
  6. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    Another question regarding loan structure after the break. I'll talk to a broker to iron this out, but some prior input would be appreciated. I'm thinking: Split the loan into say, 5 pieces of $55,000. - 4 x fixed - 1 x variable (or some combination thereof) That way, if...
  7. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    $10k annually.
  8. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    Thanks for clarifying! Very helpful to know.
  9. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    Thanks for that tip too. Something I'm mindful of. For the purpose of my question I haven't gone into all the details but were I to break, I'd plan on dodging excessive LMI by timing it after a lump sum repayment (and more growth, which is unstoppable at the moment).
  10. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    Is adding $28k to my loan (but henceforth saving myself $7k annually in interest), going to increase my borrowing capacity, diminish it, or have a negligible effect? TMNT, I wish I never knew either..
  11. Richard Feynman

    $28k break fee before buying first IP – borrowing capacity impact?

    I'd like to pass this by some wise/experienced SSers. I'll be buying my first IP before the year is out and want to explore this scenario in terms of how it might affect my borrowing capacity. Current situation: - PPOR loan fixed for another 12 years 8.09% (I know, I know) - Current loan...
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