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Hi SS, just another question regarding the interest only split loan (Loan B) that I have now set up.
I was advised by the bank that the redraw facility only allows redraws to another of my (ie. normal savings) accounts before I can transfer funds to other accounts - is this still ok?
I have attached a new offset account to the new split loan to separate it from everything else, would it be better to redraw to the offset then transfer to other accounts ? Or get the bank (NAB) to allow me to redraw straight out into other accounts ?
Hey All,
I seem to read a lot about PPOR becoming IP's and that it is not ideal that so much principal has been paid off.
If this is the case is there ever really any benefit to paying off principal on any loans if you plan to invest in property? Are you just not better parking the extra funds in an offset (warranted you are a good saver and do not see all this extra cash as a holiday each year).
I mean most people can expect to go through a few properties in there time as circumstances change. Start of as a couple in a 2 bedder, upsize when the first child comes along, upsize when the third does, move to the beach once the kids move out, downsize to low maintenance when your older.etc
Paying off loans is generally a good thing. But from a tax saving point of view it may be better to not pay any loan down at all, but utilise the offset account to make the same savings.
However if you are tempted to spend money this strategy may not be for you.
It would take a very diligent saver not to dip into this.