Hi,
My partner and I are looking at buying a house to live in soon and need some advice on mortgage structuring.
We are currently living in a 2 bedroom unit that I bought in 2008 for $303k. It was valued at $345k yesterday. There is $205k remaining on the mortgage, and $80k available for redraw. We will be renting the unit out after buying the new house for around $350 per week. The new house will be in the $550k-$650k price range.
Before discovering this site, my plan was to:
- redraw all of the $80k off the unit’s mortgage for a deposit on the home (keeping $10k for safety)
- get a basic variable home loan for the new house with unlimited redraw (same as for the unit)
- make P&I repayments on both loans, but salary crediting on the house’s mortgage and making only the minimum repayments on the unit’s mortgage
- negative gear the unit
After reading through some posts on this website, I am now unsure if this is the best way of doing things. Is there a smarter option to structure these two loans?
Any advice would be greatly appreciated.
Cheers,
LMac
My partner and I are looking at buying a house to live in soon and need some advice on mortgage structuring.
We are currently living in a 2 bedroom unit that I bought in 2008 for $303k. It was valued at $345k yesterday. There is $205k remaining on the mortgage, and $80k available for redraw. We will be renting the unit out after buying the new house for around $350 per week. The new house will be in the $550k-$650k price range.
Before discovering this site, my plan was to:
- redraw all of the $80k off the unit’s mortgage for a deposit on the home (keeping $10k for safety)
- get a basic variable home loan for the new house with unlimited redraw (same as for the unit)
- make P&I repayments on both loans, but salary crediting on the house’s mortgage and making only the minimum repayments on the unit’s mortgage
- negative gear the unit
After reading through some posts on this website, I am now unsure if this is the best way of doing things. Is there a smarter option to structure these two loans?
Any advice would be greatly appreciated.
Cheers,
LMac