Hi All,
I am just wondering the best way to do my loan. My broker advised me to go with a P&I loan, unless I planned to turn my PPOR (first home buyer) into a IP in the future.
My situation;
Loan 305,000
With CBA and paying P&I.
100% Offest account
$10,000 in offset account
+$2000 in loan account.
Now, if I stay as is, putting all extra money into the offset account, then in say 2 years, lets say I will have $20,000 in there (pure ball park figures being used here). and I will have paid the loan down to, lets say $270,000.
If I was to move it all to an interest only loan, WITH a 100% offset account, but continued making the same payments (ie. $500 a week, not the less for interest only - at a guess $300 a week) plus my additional amount (ATM 600/week total). Would I be in the exact same position in terms of money, but instead, of $20,000 cash in offset and $30,000 in the loan, I would have $50,000 in offset, and none in the loan.
So assuming that is correct - should I switch to an IO loan - becuase I am disciplined enough to keep the payments above what they need to be. This would mean that I have cash ready for another house (be it IP or PPOR) so I am more attractive to the banks?
Or does it not matter, do the bank just go "he's worth X amount cause either way the money is either in cash or the house"
Cheers
Chris
I am just wondering the best way to do my loan. My broker advised me to go with a P&I loan, unless I planned to turn my PPOR (first home buyer) into a IP in the future.
My situation;
Loan 305,000
With CBA and paying P&I.
100% Offest account
$10,000 in offset account
+$2000 in loan account.
Now, if I stay as is, putting all extra money into the offset account, then in say 2 years, lets say I will have $20,000 in there (pure ball park figures being used here). and I will have paid the loan down to, lets say $270,000.
If I was to move it all to an interest only loan, WITH a 100% offset account, but continued making the same payments (ie. $500 a week, not the less for interest only - at a guess $300 a week) plus my additional amount (ATM 600/week total). Would I be in the exact same position in terms of money, but instead, of $20,000 cash in offset and $30,000 in the loan, I would have $50,000 in offset, and none in the loan.
So assuming that is correct - should I switch to an IO loan - becuase I am disciplined enough to keep the payments above what they need to be. This would mean that I have cash ready for another house (be it IP or PPOR) so I am more attractive to the banks?
Or does it not matter, do the bank just go "he's worth X amount cause either way the money is either in cash or the house"
Cheers
Chris