Can't live in my house don't want to pay rent!

[4GH1RH]

Hi

I rented out my four bedroom house for $380 a week last year when I moved in with my fiancé. I have an interest only offset loan for $210K with ANZ and the house is worth around $400K.

I can't move back to my house as (a) I have tenants and (b) it will not be cost effective to move back when I am getting good rent to cover interest and expenses.

I do not want to pay rent as IMHO it is money wasted. What I was thinking was:

1. Draw some equity out of the house.
$400K - $210K - $190K.
80% of $190K is around $150K.

2. Look at buying another house in Cairns for ~$300K so $330K with expenses
Use equity for 20% deposit and 10% expenses = $60K+$30K=$90K
Take out a loan for 80% = $240K

3. Repayments on $240K loan at 7.05% are $350 a week. I bring home $700 a week after tax.I don't have any other loans or expenses and no dependents.


Is this feasible and how can I tweak this to best advantage.

Thanks in advance, Cam

 

[tobe]

repayments on $240, plus the deposit borrowed as well. $700 per week net income doesnt smell like you can afford it.

What would the likely rental be if you rented instead?

renting isnt dead money, everyone has to pay for accomodation, either to a landlord, to a bank, or they forego the opportunity cost of a fully paid off house.....

 

[vaughan]

Buy a place with a granny flat... you live in the flat, rent out the main house.

 

[Sunfish]

In Cairns, I'd rent.

 

[Dazz]

I moved in with my fiancé.

....so what's changed this situation ?? You haven't told us the full story yet.

 

[luckyone]

Hi

1. Draw some equity out of the house.
$400K - $210K - $190K.
80% of $190K is around $150K.

I don't think you have this equation right. From my understanding it should be:-

$400K * 80% = 320K
- balance owing of 210K
= equity of $110K, not $150K.