offsets/loc

[beech]

Hypothetical now, relivant in future.
Say i now owe 100k on ppor, payments were $1000mnth p&i.
I draw 100k out of IP equity to offset against ppor loan,what are my new payments monthly to the bank at current rates?
Would i be right to say i would owe the bank 7k on the IP loc @7%,yearly,& non deductable.
Maybe im better off re serviceability without having to pay any principal.Any other benefits if at all?


thanx Darren

 

[Rolf Latham]

Hi

Usually your repayments will not change on a P&I loan, but your interest charged will decrease, so the principla is redrawn more quickly and the term of the loan is reduced.

Unless there is a big gap between your PPOR and IP interest rate I cant see any advantage in doing that in any case since you will not be able to get a deduction on the new IP (but PPOR debt)

Ta

rolf

 

[beech]

Just the man i was hoping would answer that one.
Thanks Rolf.


Darren