About to buy PPOR, what's the best way to finance?

[gooram]

Hi Forum,

I've been out of the loop for a while on a sabattical. I've just returned to Perth and the property I have been renting has been offered for sale to my partner and I for what we think is a great price.

I have the cash in the bank for my half of the price, it's currently offsetting my IP. I'm thinking the best option would be to get an IO loan for the PPOR, then move the money from the IP offset account to a new PPOR offset account.

Aside from the borrowing costs is there anything wrong with this strategy? The benefit is that I will still have access to the money if need be, and also that when we want to upgrade, we can keep this new place as an IP and move the money in the offset to the new PPOR, therefore maximising deductible interest.

Does anyone have any different options for this scenario that I may not have thought of?

Thanks very much,
Gooram

 

[murtagh]

Does anyone have any different options for this scenario that I may not have thought of?

Hi Gooram,

I think you're spot-on with your idea - better to offset the PPOR debt than the IP debt.

Cheers.

 

[Qlds007]

You are bang on with your strategy.

Just make sure that your lender can cope with an IO loan with a 100% offset account and it is a true 100% offset account.

 

[atti]

provided that you have money sitting in offset account ?