Hi all
First let me say, thanks to all of the contributors - this is a seriously helpful forum.
Background
First let me say, thanks to all of the contributors - this is a seriously helpful forum.
Background
- I am in the process of selling my PPOR (fully paid off) for $500k.
- I have made an offer to buy a new PPOR for $950k.
- For the purposes of my question, please assume that my current PPOR will settle before I settle on the new PPOR.
- I am seeking to maximise my borrowing capacity as I intend to rent my new PPOR in a few years.
- I have briefly spoken to a mortgage broker who informs me that he *thinks* he can secure an interest only loan for me in the amount of $760k at or around 5.25%. I will then park the remainder of my funds in an offset account.
- I have seen that loans.com.au have a "blackboard" special for a loan product that meets my requirements with a lower interest rate of 4.75% (as compared to 5.25% offered by the broker). From my discussions with Loans.com.au, I can borrow up to $650k on my income.
- The broker's loan product will cost me an additional $2,500 per year in interest repayments. However, I will be able to borrow approximately $110k more if I use the broker (and therefore increase my deductions down the track when I convert the property into an IP).
- Obviously there is a tension between my objective to maximise borrowings and my goal of minimising interest repayments. Based on these circumstances, which loan product should I pursue?