Need a push to change to IO

[Bez]

Hey everyone,
Im currently paying P&I on my IP, as iv lernt from reading this forum and other forums is that its better to have IO loans on IP's..

I keep saying im going to change to IO but I keep putting it off, there is no reason for me to be paying P&I is there ?

Changing from P&I to IO will save me about $35 a week,

 

[DavidMc]

It's personal preference. It depends on what you plan to do with that $35 per week. If you plan to use it to fund other assets, then IO is the way to go.

 

[Simon]

What will you do with the $35 pw?

if it dissappears into your spending for no resultant increase in net worth then I suggest you stay as you are.

If, however, you have any personal debt then this is probably the best place for it. A PPOR loan for example. Or a PPOR deposit account. Save it in a managed fund maybe.

But unless it goes towards increasing your net worth then stay as you are.

Ciao,

 

[yo yo ma]

If you are disiplined with your spending, then it is best to open an offset account & put the extra money in there (making sure it is a 100% offset). Whenever you decide to invest again, you can just pull the money from the offset account & use it as needed. You should obviously check the structure of the loan with your broker/ accountant.

If you tend to spend a bit if the extra money is available, you should keep the loan as is.
Steve