Hi Everyone,
I think it's a given that I should switch to interest only...but thought I'd pose my situation to you all just in case it's not a good idea.
1) PPOR is valued at $450K. Originally took out $220K P+I loan in 2002 at 90% LVR. $180K owing. I know now I should have done it at IO from the beginning. It's this loan that's the topic of this discussion.
2) Recently purchased another property for $620K. Loans are interest only using equity in PPOR, 80% LVR. Will be an investment property for 5 years.
3) Planning to swap between PPOR and investment property in 5 years where current PPOR will become investment property.
4) Enough cash to cover $180K owing on PPOR and put into 100% offset account.
For $350 renegotiation fee, I feel that I should change the $180K owing PPOR loan to IO for 10 years. If I don't, I'll be paying back $13K+ principle only annually due to cash balance!? This will make it even less tax effective when comparing value of current PPOR vs loan remaining five years down the track (I may need to look at selling to unit trust...)
Looking forward to your thoughts and ideas!
Cheers.
I think it's a given that I should switch to interest only...but thought I'd pose my situation to you all just in case it's not a good idea.
1) PPOR is valued at $450K. Originally took out $220K P+I loan in 2002 at 90% LVR. $180K owing. I know now I should have done it at IO from the beginning. It's this loan that's the topic of this discussion.
2) Recently purchased another property for $620K. Loans are interest only using equity in PPOR, 80% LVR. Will be an investment property for 5 years.
3) Planning to swap between PPOR and investment property in 5 years where current PPOR will become investment property.
4) Enough cash to cover $180K owing on PPOR and put into 100% offset account.
For $350 renegotiation fee, I feel that I should change the $180K owing PPOR loan to IO for 10 years. If I don't, I'll be paying back $13K+ principle only annually due to cash balance!? This will make it even less tax effective when comparing value of current PPOR vs loan remaining five years down the track (I may need to look at selling to unit trust...)
Looking forward to your thoughts and ideas!
Cheers.