IO vs PI loans

[veebeeseewee]

There are offset accounts which have no fees, I have one with Westpac. The benefits of an offset are to reduce the interest your paying on your mtg. You would actually earn % your paying on your mtg at say 7% which you'd never be able to earn in a savings account and then you'd be taxed on your earnings.

The one I'm looking to go with is Bankwest's Super Start Home Loan, only 6.9% interest and with other great deals. But because this package provides some benefits, it cost some maintenance fee for its offset account.

 

[Peter_Tersteeg]

The one I'm looking to go with is Bankwest's Super Start Home Loan, only 6.9% interest and with other great deals. But because this package provides some benefits, it cost some maintenance fee for its offset account.

You've got to ask yourself what's going to deliver to you better savings?

0.1% reduction in interest rate or cashflow savings and convinience with a better offset account?

There are also other products with comparible interest rates and offset accounts; alternatives that may be worth considering.

 

[veebeeseewee]

You've got to ask yourself what's going to deliver to you better savings?

0.1% reduction in interest rate or cashflow savings and convinience with a better offset account?

There are also other products with comparible interest rates and offset accounts; alternatives that may be worth considering.

That's because this is the bank (maybe the only one) who will lend me up to 95% loan for an IP with the cash I have and my financial situation, according to my current broker. My first broker (from Aussie) told me because it's an IP, I can only lend up to 90% and even I suggested Bankwest to him (after I found out from my second broker), the amount of money I can borrow according to him is much less than what my second broker said to me. As I'd spoken to Bankwest directly, it's proven that my second broker is correct. That's why it appears to me that Bankwest's current package is the only one who suits my need at the moment.

 

[Rolf Latham]

That's because this is the bank (maybe the only one) who will lend me up to 95% loan for an IP with the cash I have and my financial situation, according to my current broker.

possible, but unlikely

BWA has an OK service model and QBE being their mortgage insurer offers a bit of flex, but there many others thay will do 95 % IO lends for IPs

ta
rolf

 

[THEGREAT888]

Hi 888

An loc in this instance is ok to use provided this loc isnt mixed purpose.

Remember that a LOC is just a loan type, nothing more nothing less, and the same rules that apply to loan structurig and for eg tax issues apply to LOC as well, but are a little bit compounded with the issues that are unque to LOC

ta

[CODE][QUOTE][INDENT][QUOTE][/QUOTE][/INDENT][/QUOTE][/CODE]

Hi Ralf

Thank you for your response.

When paying 10% deposit to an IP, how do I withdraw the deposit from LOC to ensure it is tax deductible? I had never used LOC before. . Can i transfer the fund from the LOC to savings/cheque account?

I only have one saving offset account and it is used for all purpose. My home loan though are well set up. Each home loan account has been approved specifically for its purpose.

 

[THEGREAT888]

Rolf Latham
Moderator

Join Date: Mar 2001
Location: Confused = Sydney, Brisbane and Gold Coast
Posts: 9,976


Hi 888

An loc in this instance is ok to use provided this loc isnt mixed purpose.

Remember that a LOC is just a loan type, nothing more nothing less, and the same rules that apply to loan structurig and for eg tax issues apply to LOC as well, but are a little bit compounded with the issues that are unque to LOC

ta
testing the usage of quote

 

[veebeeseewee]

possible, but unlikely

BWA has an OK service model and QBE being their mortgage insurer offers a bit of flex, but there many others thay will do 95 % IO lends for IPs

ta
rolf

Perhaps I'll have to check with my broker if I meet other banks' criteria. Thanks for your suggestion, Rolf!