Seeking advice / points of view on my situation

Hi forum members,

I'm looking for some advice / different points of view on my situation:

I have a PPOR in a great location within 4km of a city centre valued at about $600k.

My mortgage is $140k.

I have $90k sitting in 100% offset account at 4.35%, 2 years fixed.
I am currently paying IO, and due to switch to P&I in about 3.5 years

My equity in my PPOR is about $550k and I have no other debts.
Super is about $90k.

My income is fairly low (about $35k) as I work part-time by choice. I am somewhat interested in buying an IP, however, my work situation is currently somewhat unstable due to funding changes in my sector, so at this time I'm not so eager to take on more debt.

My age is 48.

My question:

With my fixed interest loan I am allowed to pay $20k into the principal each year.

Do you think it's advisable to pay down the principal as much as possible so I can pay off the mortgage entirely?

Or is it better to just pour everything into the offset account, eventually reaching $140k in the offset and therefore $0 interest per month? In 3.5 years the loan will switch to P&I.

I'm sure there are factors I haven't considered, so I would be interested in hearing others' points of view.

thanks
 
Always offset. Unless you're terrible at managing your money and need a means of forced savings there's no reason to pay it down. And if your industry is volatile then even more of a reason to keep the powder dry.
 
There's no reason to pay down the debt at the moment and if your job future is uncertain, I can understand your reluctance to take on more long term debt.

If you want to invest, you might want to consider shares, which don't have the high entry/exit costs of property and can be sold at short notice if required.
 
In your shoes I'd be paying down the mortgage (whichever way you can, not fussed about method) and contributing as much as possible to Super.

12 years of super contributions of $3k (your 9.5%) + say $7k salary sacrificed (if you are able too without it impacting your lifestyle) is approx $100k after the 15% contributions tax, which takes you through to age 60.

Add together your existing $90k + investment gains and you could be looking at a nest egg of about over $300k. More if you contribute additional pay rises during this time, + whatever money is freed up after you finish your mortgage.
 
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