Hi All,
I have just used equity from one of my IP's as a deposit for my 3rd IP. I spoke to my broker and wanted an off-set account, see I have 50K in savings I wanted to throw into the offset account, and from what he told me, that will reduce my monthly interest bill.
Eg, I bought a house for $300,000 with 10% deposit. At 6.18% my interest only repayment comes to $1,390.50. Now if I throw that 50K into the offset, that should reduce my outstanding debt to $1,186.22. Is my understanding correct?
I just read an article in "your mortgage" magazine that states the following:
"However, since your monthly repayments are calculated on the original amount, you are effectively paying extra on your mortgage each month"....HUH????
I don't understand, if my original loan amount is $270,000 (10% -deposit), and I add 50K to my offset, which means my loan outstanding is effectively $220,000 (until I take it out again), how can offset me calculated on the "original amount" and still reduce my monthly repayments.
Can someone clear this up for me? I dont want to make a mistake.
I have just used equity from one of my IP's as a deposit for my 3rd IP. I spoke to my broker and wanted an off-set account, see I have 50K in savings I wanted to throw into the offset account, and from what he told me, that will reduce my monthly interest bill.
Eg, I bought a house for $300,000 with 10% deposit. At 6.18% my interest only repayment comes to $1,390.50. Now if I throw that 50K into the offset, that should reduce my outstanding debt to $1,186.22. Is my understanding correct?
I just read an article in "your mortgage" magazine that states the following:
"However, since your monthly repayments are calculated on the original amount, you are effectively paying extra on your mortgage each month"....HUH????
I don't understand, if my original loan amount is $270,000 (10% -deposit), and I add 50K to my offset, which means my loan outstanding is effectively $220,000 (until I take it out again), how can offset me calculated on the "original amount" and still reduce my monthly repayments.
Can someone clear this up for me? I dont want to make a mistake.