I have an offer on my underperforming house And am going to look for a better property to move forward with my investing via a security swap, My question is,
what’s the best way to hold funds in a term deposit while I source another property in terms of keeping the costs down? Interest rates are non existent compared to the investment loan rate of 3.30%.
Thanks in advance!JaxonParticipant@jaxonaJoin Date: 2014Post Count: 284
take the profits and apply for a new loan is the best way.
If you need to keep the loan open see if the lender will allow it firstly. Your only choice would be a term deposit at the prevailing interest rate. The only way to mitigate this is to keep the period between sale settlement and purchase settlement to a minimum.
sorry I should of explained better. I cannot get a new loan At the moment due to income and job keeper, so keeping the existing loan open, currently at 3.3%
By holding costs I mean I will still have to repay the loan while not receiving any income from the old property, I was wondering if anyone has experience changing the loan to interest only, or owner occupied etc before transferring in the term deposit? To keep the cost of the repayment down?
thanks again for your help, still working on my investor education 👌
Changing to IO will result in a reassessment.
Have you spoken to the lender to see if they will allow the substitution of security to a term deposit?
Yes, the lender is Anz, apparently one of the only lenders that offer the service, based on their value Of the new security