Difference between CBA's Offset Loan (MISA) and Line of Credit

Discussion in 'Property Finance' started by angel0death, 30th Aug, 2012.

  1. angel0death

    angel0death Member

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    Hi. I want to refinance my IP, and was approved for CBA's Line of Credit. However, reading some of the posts in this forum, there's always mention to have an offset account instead because Tax declarations will be much cleaner. CBA has the MISA product which is basically an offset account.

    I've got the approval for Line of Credit. Though, I haven't signed anything yet. I'll ask my broker to change the application to MISA, but said that it'll be a new application. That's fine with me, as long as I get the loan structure right from the beginning.

    Is this a good move? Any other things I should be looking out for?
    Thanks.
     
  2. Rolf Latham

    Rolf Latham Member

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    what will you use the product for??

    is it for owner occ use or IP use

    what is it secured to

    do you have a non ded debt left

    ta'rolf
     
  3. shuggy

    shuggy Banned

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    Think of the MISA (offset acc) as a big personal savings account and the Viridian LOC as a big credit card. Two completely different things but i would get them both set up.

    You can withdraw money from the MISA account for anything you want like new shoes or some BHP shares. You can only claim the interest on the LOC if it's used to produce income such as buying shares, managed funds or expenses related to an IP. ANy costs incurred in producing an income are generally tax deductible so don't draw down the LOC to buy new shoes.
     
  4. Rolf Latham

    Rolf Latham Member

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    xcept they are mutually exclusive

    Viridian cant have a MISA attached to it.


    However,you can run a SVR loan with MISA and a separate LOC on the same security, as shuggy points out, for diff purposes

    ta
    rolf
     
  5. angel0death

    angel0death Member

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    Hi Rolf.
    I'm wanting to refinance my current PPOR, which I will rent out soon (to become IP).
    The loan is secured to the property.

    Back to your question "do you have a non ded debt left".
    That's a good point. There is currently some non deductible debt in my current loan since it's an PPOR. I'll have to take them out first before refinancing, yeah?
     
  6. Rolf Latham

    Rolf Latham Member

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    Id suggest you speak with a broker or an accountant, OR

    list the full guts of it here : )

    ta

    rolf
     
  7. Peter 14.7

    Peter 14.7 Wannabee Farmer

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    Add the MISA offset on Fixed Loans with CBA is not 100% more like 30%. Not really worth it and argument against fixing.

    Peter