Just curious to see what percentage of people on here have interest only loans on their PPOR. I think we would have a different mindset to non investors who would mostly be on Principal & Interest. I'm currently renting but have big problems with where I am ATM however struggling to find another place I find suitable, however there is a lot available for sale instead - So now considering buying instead.
PPOR Payments - Interest Only or Principal & Interest
- Thread starter Anon_
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My PPOR is interest only for cash flow reasons and also I control my money not the bank.
An effective strategy would be to go interest only with an offset so principal is not paid down. This will maximise interest deductions in the advent that you rent the property in the future. If you don't rent property and stay there until paid off via offset account balance then no harm done and the loan stays open as a bonus.
An effective strategy would be to go interest only with an offset so principal is not paid down. This will maximise interest deductions in the advent that you rent the property in the future. If you don't rent property and stay there until paid off via offset account balance then no harm done and the loan stays open as a bonus.
I'm actually P&I with higher than required minimum repayments. We do this because our cashflow is reasonably healthy and we expect to live there for another 20 years. We don't borrow against the equity for investment purposes either (the IP portfolio does that). I'd actually like to own it outright.
Maybe a forth choice ......
We own PPOR , but have a LOC which we use for investment purposes.
Cliff
We own PPOR , but have a LOC which we use for investment purposes.
Cliff
Principle and interest, and paying it down like crazy.
"Hedge your bets" is one of my mottos!
Interest only with offset - all spare cash gets placed in offset. Not for cashflow but for future planning.
I don't know where we'll be living in 5 to 10 years -chances are it will be in the same home but I still prefer to leave my options open and if we ever moved from it - we'd rent it out (I don't like to sell) so preserving the principle makes sense.
Cheers
Jamie
I don't know where we'll be living in 5 to 10 years -chances are it will be in the same home but I still prefer to leave my options open and if we ever moved from it - we'd rent it out (I don't like to sell) so preserving the principle makes sense.
Cheers
Jamie
For those who pay P&I, is there any advantage in that over putting the equivalent principal repayments in an offset account?
I cant see how but each to their own. Banks want the money back eventually but a request to extend interest only period can be made or refi to another bank and reset interest only period is an option.
No but it is a psychological thing.
Bit of an oxymoron that the word physchological contains the word logic!
Sorry, I should have realised.
I've added another option for people who have paid off their PPOR.
With some lenders, your serviceability is actually better with P&I repayments, but I do it because I'd actually like to own my own home outright. I'll leave the risk in the investment portfolio.
Care to share which lenders PT or is that a trade secret?
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