Family trust bank loan setup – which account?

Thanks Terry.

I forgot to clarify:

The offer of 80% at IO for 5 years and additional 10% at P+I to be paid down in 3 years would not require any lenders mortgage insurance.

Using a round figure of 450,000 property cost this means I have to pay down 45000 in principal in 36 months.

Within the family trust, I understand that the interest portion of the 90% total loan is considered a “loss” to be offset against “income” – being the rental income.

However I wonder if the principal payments (45000/36= 1250 per month) is also a “loss” to be offset against the rental income? I understand the answer is “NO” in a normal personal investment setting but what about in a family trust?

Thanks Terry

That is a good thing then if the principal part of the loan repayments is not considered a deduction/loss which will offset the rental income – otherwise I will go from neutral/positive geared within the trust to negative!

If this is the case then it’s prob worthwhile considering this 80%IO+10% P&I without LMI, so I won’t have to fork out existing savings to cover the 10% myself upfront.

Have appointment with accountant next week to double check all the the issues/questions so far with trust loans. Any other curly questions I should be asking the accountant?