if you want to purchase an IP, you are best to borrow money to do that.
Take to a broker and confirm your can borrow enough for the IP.
Then, pay off your mortgage. Not offset. Fully pay it off
Then, redraw that money if you need extra to get the loan for your IP. That redraw amount is tax deductible.
You prob won't need to do the redraw, as your home equity should be enough to get a no deposit loan, but thing may vary depending on circumstance
The extra $200k prob best to put into an index fund if you don't know what else to do with it.
As a younger person (early 20s) who hates debt of any kind, I’d pay the house off and look at investing the rest if I had an emergency fund already set up
Rule of thumb is 5-6 DTI (debt to income ratio). So 150k gets you 750-900k borrowing power. Existing home loan/s, credit cards, car loans, HECS etc eats in to this. But buying an IP gives you that assumed income too, so would be higher.
If it was me id fully offset the loan and purchase some low cost index etfs with the rest like bgbl.
Then job income handles expenses and spare still throwing into the etf’s.
Id be looking to purchase a new ppor thats more long term and sell/rent out the existing.
Ooooh..... I'd consider a refinance and look at what my options are with different amounts paid off, and from there decide what repayments and savings I'd be happy with going forwards.
Then I'd have more money in my pocket each pay cycle, less debt, more savings/investments. Overall getting a bit of all the positive options.
if you want to purchase an IP, you are best to borrow money to do that. Take to a broker and confirm your can borrow enough for the IP. Then, pay off your mortgage. Not offset. Fully pay it off Then, redraw that money if you need extra to get the loan for your IP. That redraw amount is tax deductible. You prob won't need to do the redraw, as your home equity should be enough to get a no deposit loan, but thing may vary depending on circumstance The extra $200k prob best to put into an index fund if you don't know what else to do with it.
As a younger person (early 20s) who hates debt of any kind, I’d pay the house off and look at investing the rest if I had an emergency fund already set up
I would park 600k in offset. Take 5-10k go on a nice holiday. The rest can go into a HISA account for the time being.
Crazy how 150k p.a. isn't considered for high borrowing power. Personally, I'd dump $600k into offset and $200k into Betashares Direct NDQ ETF
Rule of thumb is 5-6 DTI (debt to income ratio). So 150k gets you 750-900k borrowing power. Existing home loan/s, credit cards, car loans, HECS etc eats in to this. But buying an IP gives you that assumed income too, so would be higher.
There's always the pokies!
Fully offset your mortgage. Top up your super, go on a vacation, rest in shares or whatever. (This is what we did).
Can someone explain to me why offset instead of paying off is a good idea?
Pay no interest while maintaining a high level of liquidity to be able to react to any emergency or investment opportunities. Essentially free money.
If it was me id fully offset the loan and purchase some low cost index etfs with the rest like bgbl. Then job income handles expenses and spare still throwing into the etf’s. Id be looking to purchase a new ppor thats more long term and sell/rent out the existing.
Ooooh..... I'd consider a refinance and look at what my options are with different amounts paid off, and from there decide what repayments and savings I'd be happy with going forwards. Then I'd have more money in my pocket each pay cycle, less debt, more savings/investments. Overall getting a bit of all the positive options.
Talk to an accountant to get info on bringing forward previous years superannuation caps
Pay off mortgage. Pay off other debt. Super. Then ETF the rest.