best option

just after some advice as to the best option a little back ground first aiming to buy first IP own PPOR nil debt earn $800 a week ater tax $200 000 loan required to buy IP


1. use rent from IP which will be $250 a week plus $300 a week of my wage to repay loan or



2. use rent $250 plus X amount of my wage to meet minimum loan re payments

which option would you choose and reason. thanks
 
Assuming this is to pay off PPOR?

Option 2 where

X = $800 - (minimum required for basic subsistence living)


Probably better if rent and $800 going into offset against PPOR, and drawing out as little as possible to live on (same effect, different flexibility)

Cheers,

The Y-man
 
So you have nil debt?

If so I would suggest you get an IO loan with a 100% offset account. Pay all rent and wages etc into the offset and you will be saving the same amount of interest as if you had paid it off the loan.

You will also have your money still available while paying the minimum for the investment.

I would only suggest you pay down the IP faster if you have a problem controlling yourself spending.
 
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