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Thank you. I actually wasn't expecting such a logical staight forward simple answer to that !

Why not purchase some blue chip shares which provide a 10% return Sorry, just had to throw that cat amongst the pigeons

OK, I can understand that part now....

the fact that the cashbond returns less than the interest on the loan it was founded from still makes it sound to me as if you'd ony use it if you don't need to, for reasons I can't really work out. or if you has nearly enough equity to buy it outright but not quite and not enough income to...

Cheers, Rick, I didn't want it to sound like I was "quwstioning" what you "weren't telling us".... So is there a benefit of cashbonds over the LOC method ? I can really only think of the security etc over the proerty & Loans... The new mortgage would be against the new property..the LOC...

Perhaps that wasn;t as clear to some of us as you intended to make it - jsut saying, you know.... which is probalby why people like me can;t see how / when it would be relevant IF I had on ly $100k LOC approve dononly and at high as hell LVR, , it would not be the best thing to do./...

locko, We are questioning what we do not understand. , depstie the multiple pages of dsicussion on it. Perhaps you can answer the questions for us and be one to provide som eof the constructive input ?? I am getting the impression that thi sis good for people hwho ahve builit up...

SO it will work well if you have a shedload of equity but not enough income in the bank's eyse If I wnated to buy asay a $500k property And I had say a $600k LOC available... but m,y income was too low and the bank said nah, we wont lednd you more money as amotgage... Instead of buying a...

SO the idea is to use casshbonds when you find yourself without en ough INCOME to service th a new mortgage for anew investment So you use equity to purhcawe a cahsbond, which give s you income Look say I wanted to buya $400k property and I had $150k or LOC ...but not enough income to...