How a redraw feature generally works is as it is different for Principle & Interest (P&I) loans as to Interest Only (IO). This is because the lending institution only allows you to redraw back to the limit where the loan should be at that time.

Example;

Let say loan is $400,000 (IO) for 5 years and you make extra payments of $1000 per…[Read more]

Firstly, you have to decided whether pay 4% to break the current loan fits your purpose. You may not need to brake it to get maximum efficiency out of your situation. However, if you decide to break it would would appear to take about 2 years to recover costs just on pure interest alone.

Secondly, we need to look at why you have…[Read more]

The simple answer is it depending on the purpose of your loan and loan intentions.

1) Owner Occupied (OO) debt vs Investment (INV)

I would recommended redraw for OO and generally offset for INV. Definitely not redraw for INV as this can cause issues with taxation, however please consult your tax agent with respect to this.

Redraw…[Read more]

Interesting questions you ask. Not to disregard Duckster’s comments but sometimes locals don’t see the investment opportunities in their own neighbourhood because their too emotionally attached to the area, maybe the better question it to ask the median rental yield and the management cost for a rental property in the area.

1)…[Read more]