I noticed recently that banks took a few weeks to lower their home loan interest rates after RBA announced interest rate cut (but it didn't take them long to lower interest rates they give on various savings and term deposit accounts).   Is this something that they do to "delay" the rate reduction so they can bank in additional profits?  Doesn't t…[Read more]

imugli made a good point, if you pay off loan balance (ie. building equity) in the investment loan account, when it comes time to redraw to buy PPOR, the "future" mortgage interest on that same portion of the investment loan is no longer tax deductible, in the eyes of the ATO.  So if you plan to buy a place to live in over medium term, then probab…[Read more]

Completely agree.  May be I was too fast to assume Kyla's "situation", so I am sorry there as I do respect people to put options out of the table.As for different situations, we are actually doing the complete opposite to what I suggested to Kyla.  But that's because our situation is very different (at least we think it is, better not assume agai…[Read more]

pls don't take this the wrong way as i am genuinely asking a question here.  in the situation that kyla raised, is strategy to negative gear even make sense?  putting aside other factors like capital growth, depreciation, etc., if i have $10k extra cash, then i would pay off the mortgage rather than do anything else with the money (of course, it…[Read more]

i'd pay off the loan if interest earned in a bank desposit is going to be taxable at resident's tax rate.  why pay bank mortgage interest when you don't have to?   Set aside some emergency funds (in a high interest bank account like BankWest Telenet) to last you 3-6 months, but anything over and above that, you should try to pay off your loan as…[Read more]

I find it strange that the Government would be asking that banks, which are for-profit organizations, lower its interest rates charged to their customers.  Should we landlords lower rent because interest rates come down?  Of course not (at least I think so), unless we have to.  People are borrowing money from institutions whose sole interes…[Read more]

ok, thanks for the input.  i will just tell the guy we want to do full-doc.