All Topics / Help Needed! / Interest only Loans

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  • Profile photo of ChristineChristine
    Participant
    @christinechristinegaunt-com
    Join Date: 2015
    Post Count: 2

    Should I set up my investment property as Interest Only repayments, and why?

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Maybe.

    Do you have any non deductible debt such as an owner occ loan?

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of ChristineChristine
    Participant
    @christinechristinegaunt-com
    Join Date: 2015
    Post Count: 2

    Hi @jamie-m,
    Yes I have a second OCC loan. I am led to believe most investors set up their other loans as interest only?
    Kindest,
    Christine

    Profile photo of BuyersAgentBuyersAgent
    Participant
    @knightm
    Join Date: 2005
    Post Count: 338

    As Jamie said it depends.

    Yes I do because I want to minimise my weekly spending and maximise my cashflow efficiency. Not having to service the principle component means I get to hold positive cash flow property costs covered by rent (or if negative it still costs much less per week) this means I have more money for my next investments.

    Of course if you are nearing retirement, have oodles of cash and no plans to buy more (and your own place is paid off) then go ahead and pay down prIncipal it has to go eventually.

    BuyersAgent | Precium
    http://www.precium.com.au
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    South Coast NSW Independent Buyers Agent - Wollongong to Batemans Bay and Regional NSW. DOWNLOAD OUR FREE 14 POINT PROPERTY BUYER'S CHEATSHEET to avoid painful mistakes at precium.com.au

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416

    Hi Christine,
    Just in case it is a help, do take a peek here:-
    https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/

    There is a specific post in that link that tackles the question “Why use IO loans and not P&I loans?”
    It may expand on the WHY you should use IO area. Of course, though IO can be beneficial to many, it doesn’t suit ALL.

    Enjoy – and I hope it helps to direct your steps,

    Benny

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