Structuring finance

Hi all

I'm in the process of finalising a loan for a property we bought recently.

The property is currently tenanted.

I have applied for (and am close to finalising) an 'owner occupier' loan, as it is presently our intention to move into the property within the next 6-12 months.

It is possible, however, that, with work, I'll be relocated interstate or overseas this year.

I have gone with a principal and interest loan over 30 years and a 100% offset account, because we want to pay the loan off quickly (whether or not we are living in it).

I appreciate this is a very broad question but, in general terms, will this approach create difficulties if, for work reasons, we don't move in for, say, the next three or four years?

How can we optimise our loan, in terms of deduction and tax effectiveness, in the scenario that the property essentially becomes a rental property for at least the next few years?

(I'm obviously going to speak with an accountant, but I'm seeking your views to inform myself for this discussion.)


Id go with the IO over PI any time, especially with what you are looking to do.

Save your own tax paid money in the offset account for a later PPOR purchase.

With the PI structure u have proposed you will be in a poorer tax position.

I agree with Rolf. You won't be saving any interest by going PI over IO (as long as you don't blow the money in the offset). Plans change and by going IO you can always pay extra if and when you choose.