Hi
(Please direct me to other threads if these questions have already been answered.)
We own our PPOR outright, and currently have one investment property in 100% offset ($441K still notionally owing), with approx. $50K in an interest-earning account. We are about to settle on a second investment property (purchase price $650K; 10% deposit paid; balance owing $585K plus stamp duty, fees etc.). I have a couple of questions:
1. Are there any advantanges/disadvantages in paying off the mortgage on the first property using the offset funds? Or are there good reasons for keeping that mortgage open, and either leave it in 100% offset or splitting the offset funds between the two properties?
Possibly relevant to the answer is the fact that we own the first property as joint tenants, but are thinking of buying the second property as tenants in common with unequal shares -- possibly 80-20 in my wife's favour. My wife's income is approx. $160K pa, while mine is approx. $20K pa (not including rental income on the current or future IPs). I am late 50s and semi-retired; my wife is early 50s and fully employed, probably for another 10-15 years.
2. Would it be better for us to buy the second property as common tenants with unequal shares, keep both loans open, and then shift the offset funds from one to the other account depending on any changes in circumstances? If so, what factors should we consider when deciding where the offset funds should be?
Many thanks for any help you can offer!
(Please direct me to other threads if these questions have already been answered.)
We own our PPOR outright, and currently have one investment property in 100% offset ($441K still notionally owing), with approx. $50K in an interest-earning account. We are about to settle on a second investment property (purchase price $650K; 10% deposit paid; balance owing $585K plus stamp duty, fees etc.). I have a couple of questions:
1. Are there any advantanges/disadvantages in paying off the mortgage on the first property using the offset funds? Or are there good reasons for keeping that mortgage open, and either leave it in 100% offset or splitting the offset funds between the two properties?
Possibly relevant to the answer is the fact that we own the first property as joint tenants, but are thinking of buying the second property as tenants in common with unequal shares -- possibly 80-20 in my wife's favour. My wife's income is approx. $160K pa, while mine is approx. $20K pa (not including rental income on the current or future IPs). I am late 50s and semi-retired; my wife is early 50s and fully employed, probably for another 10-15 years.
2. Would it be better for us to buy the second property as common tenants with unequal shares, keep both loans open, and then shift the offset funds from one to the other account depending on any changes in circumstances? If so, what factors should we consider when deciding where the offset funds should be?
Many thanks for any help you can offer!