Analysis rut- general advice

[JacM]

Every little bit counts - have your salaries paid directly into the offset account if you can. That way every penny is saving you interest for as many days as possible. No time wasted transferring money into it from other accounts.

 

[Chris B]

Well done on getting to where you are so early in life. I agree with previous comments that you should try to avoid selling.

Provided you have a spare bedroom in your PPOR, you could always get a housemate. Of course it isn't for everyone but plenty of young couples are happy to do this to help pay the bills and get ahead faster. It might give you $7k per year to go towards your holidays.

As you have approx 20% equity in your PPOR, it might be worth looking if there are better loans for you to refinance to. Depending on the loan you've got, it could save you approx $1,000 per year in interest.

 

[sinead]

Thanks Chris, that exactly what we have looked into this week. Waiting for another mortgage broker to get back to us about refinancing options. Thanks!!

 

[MIW]

You have been given some sound advise. So if you rent the PPOR then just remember to convert the interest to IO, this should allow more leverage....
I wouldn't sell anything too, unless it's bad investment that you need to offload?

 

[sinead]

No bad investments (touch wood). We are struggling a little bit with cash flow but no other debts. If we change it to IO we will save $200/month plus the tax benefits

 

[Colin Rice]

No bad investments (touch wood). We are struggling a little bit with cash flow but no other debts. If we change it to IO we will save $200/month plus the tax benefits

That would be your first step then.

You could consider fixing the loan or a combination of fixed/variable with a linked offset to the variable component if cash flow is an issue.

Two reasons for this would be predictability of repayments and fixed rates are at 30 year lows. Worth considering.

 

[sinead]

Great advice, will ask the broker about this. Was tempted to fix rate recently due to lows. Might wait till the 'predicted' pre Xmas drop. Thanks so much for your advise!

 

[chindonly]

You need to work out your long-term goals (besides the holidays!) and work backwards from there.

Agree with others to keep the PPOR if possible.

Have you considered an ITWV (Income Tax Withholding Variation) if the cash flow is a little tight?