Hi 

I had a chat with my mortgage broker, and I think you are correct, hence we changed our strategy. At this moment, we will be looking for something around $500K, the holding costs will still be significant, however with proper research and planning, it should make business sense. 

Hi Ben

$750K is spending on IP. There are two in mind, first one is a house, with 700m2 land but I don't think I can subdivide it, great location and renovated already. The second one is actually $800K, with 1100m2 of land, and great potential of subdivision, as ample land in the front of the current residence, and it is about 450m2. I should…[Read more]

Hi guys

We checked few properties, and there's one in particular stood out, it is $750K. If we want the finance to be organised ASAP, when is the earliest it will be ready? 

At $750K, that we will rent it out, and the deposit comes from the current PPOR loan set up as a separate loan, how is our borrowing power?

I will try to talk to a mortgage…[Read more]

Hi Richard

Thanks for your advice. Not to overcomplicate matter, we plan to buy another PPOR in 5 years time (consideration is that when we have a primary school kid). Current PPOR will become an IP, same with new IP. My question is this will change any of your advice.

We are bit worried whether we can get loan for future PPOR, because we are…[Read more]

Hi Richard

That is a good advice indeed. Why you did not recommend using cash? One of the reasons that we want to buy an IP is because we don't want our money lying around in term deposit or even offset (my wife does not like offset, I know it is not smart).

When applying for a new loan, will they calculate projected rent income as a…[Read more]

Thanks both

I have saving up to 10% of the IP price, I have atm is $50K and I can get up to $75K if I have to. Some properties in my mind are typically units and 2 bedders, with price around $500K. Hence, say it, I have deposit for 10%-15%.

Current PPOR is valued at $625K easily, and loan $375K – hence equity: $250K.

It will be joint…[Read more]

Sorry I have another question, what is the pro and cons having 5% deposit and pay LMi as compared to having 20% deposit and not paying LMI?

For an IP, which one is more beneficial? 

Another question is, if my PPOR loan is currently on 2 year fixed and now 10 months to go, if I want to take some money out of it to fund more deposit (if  second…[Read more]

I have a question, after split, do you technically have 2 separate loans, and have to maintain them separately e.g. fees, payments, etc.

Hi Paullie

I just fixed mine for 1 year, for 5.99% with Homeside. Feel free to join. I am not sure about 2-3 years, but I have done my calculation, the chance is very slim for my current variable rate (6.55%) to beat the fixed rate. From the gesture made by ANZ to lower fixed and raise variable, it seems that they hope people will fix their rate,…[Read more]

Thanks Terry, but I am quite reluctant to change lender, first is because of the hassles, second is because the costs associated with ditching and changing lender, and third because if the number doesn’t turn out to be significant, I want to stay with NAB, have been with them almost all my time in Australia and I’m pretty happy with them.

But may…[Read more]

Thanks Terry, I completely understand that consequence.

Thanks Terry

I am considering to fix the rates only for a year. Of course, it is everyone’s common sense to think that RBA will drop interest rates. But the question are: how quick? when? will the bank pass it in full (if RBA cut too often)?

Well it is just my thought. As what I mentioned before, I learned two things from last RBA cut. First, it…[Read more]

Hi Amy,

I believe there should be a paperwork in regard to the calculation, you should ask your accountant. FYI, to calculate a refund, it needs few things to determine:
1. Assessable Income which includes the share of property losses, capital gain and employment salary. AI
2. Total Allowable Deduction ( most of them work related, and as well the…[Read more]

Terryw wrote:
What about staying as is and just paying  extra off each week via direct salary deposit?

Hi Terry

Many thanks for your reply. I still couldn’t understand, if it doesn’t cost me even one dollar, I can go back to SVR – 0.70% + Offset A/C in a year time, I will repay the principal (which is same thing as your suggestion), why…[Read more]

Shape wrote:
No- Stay with Variable and ill explain why Ferdinand.

1. Fixed rate does not offer the offset account- so your offset account will become void once you go fix.
2. Your expecting a massive bonus- in which you can NOT place into the mortgage/offset if i turned into a fix product. – if anything go half half….planning ahead is…[Read more]

Qlds007 wrote:
Should not the Broker who recommend the loan to you not be giving you this sort of advice this is what he is getting paid for.Sorry to sound calous but these Michael, Jamie, Terry etc offer their valuable advice for free and yet it is your current Broker who is receiving remuneration.CheersYours in Finance

I am sorry Richard to…[Read more]

IMO, In regard to Fixing is NEVER about beating the market, it might be the correct when the fixed rate is in Contango (Fixed>Variable), but when it is in Backwardation (Fixed is lower than Variable), I would think, by understanding the yield curve, beating the market is achievable, in my…[Read more]

Guys,

I am back… with same old problem hahaha.. four months have passed now, and I am enjoying a lot the house, slightly further than where I lived before, but transports are great, so not really a big deal.

My experience is very difficult to maintain motivation with offset account, especially when Christmas is coming. I previously forecasted…[Read more]

Based on the comparison rate, my current variable is lower than the one of fixed rate. Does that mean in term of real cost, my current one is already cheaper than the fixed one ? Change the bank, unlikely… sell the house, very unlikely, but only God knows.

Unlikely up, but could be flat, has been for a while