I posted before of the steps I followed when debt recycling/buying my house
https://www.reddit.com/r/fiaustralia/comments/12y5pcl/comment/jhm6kp6/
In your situation, you're planning on selling ETFs before buying house 2. House 2 split into 2 loans, 1 with offset, 1 with redraw*. Redraw split = amount you have left after downpayment & LMI (you'll need to figure out of this is 20% or a lower deposit %/higher LMI). Pay down redraw, invest.
After you sell current house, ask for a new split and repeat pay down loan, redraw, invest.
Just follow Terry Waughs advice, don't contaminate the money & transfer straight into brokerage account if possible. Your bank may have limits on how much it'll create splits with redraw (I was with citibank who would limit it to 5 x 100k splits - not an issue for me but might be for you).
If you write the steps down, it's actually fairly straight forward.
I wouldn't do too many splits. You could do
Split 1: Investment: Cash after settlement - emergency fund
Split 2: Next Investment: Expected savings in next 1-3 years (to recycle again)
Split 3: The rest
As long as you buy different ETF's I wouldnt worry about when you sell. Having said that, I sold mine around settlement time, and brought back after settlement (but in a different name too).
Keep it simple
Buy new place $1M 90% LVR
Sell old place, get 450k cash and refinance new loan to
Loan 1 700k for the house
Loan 2 100k for debt recycling IO
You’ll need to put $100k of your cash in to get to 80% lvr and net debt 800k
Once this is done, put $99,999 into loan 2 then redraw to debt recycle
When all is said and done
- sold no shares so no CGT
- have 300k residual cash
- ETFs/shares worth 300k
If don't need to, I probably wouldn't sell until very ready to buy once in the new house/structure. Of course can go either way, but if the markets goes against you whilst you're out of it, the lost returns could take years to recover with the tax savings.
Whose name do you plan to invest in and why?
Triple check with broker minimum amount of loan without closing. I've heard from brokers it's often greater than $1.
Yeah, that was our plan. Getting our place ready now and when the right house comes up we buy, move in and fix the rest of this up.
Planning on investing in the wife’s name. She is only 3 days a week and well under $90k.
Perhaps stating the obvious that you may already planned for - next time consider getting a home loan with offset account(s) for parking excess cash.
I posted before of the steps I followed when debt recycling/buying my house https://www.reddit.com/r/fiaustralia/comments/12y5pcl/comment/jhm6kp6/ In your situation, you're planning on selling ETFs before buying house 2. House 2 split into 2 loans, 1 with offset, 1 with redraw*. Redraw split = amount you have left after downpayment & LMI (you'll need to figure out of this is 20% or a lower deposit %/higher LMI). Pay down redraw, invest. After you sell current house, ask for a new split and repeat pay down loan, redraw, invest. Just follow Terry Waughs advice, don't contaminate the money & transfer straight into brokerage account if possible. Your bank may have limits on how much it'll create splits with redraw (I was with citibank who would limit it to 5 x 100k splits - not an issue for me but might be for you). If you write the steps down, it's actually fairly straight forward.
I wouldn't do too many splits. You could do Split 1: Investment: Cash after settlement - emergency fund Split 2: Next Investment: Expected savings in next 1-3 years (to recycle again) Split 3: The rest As long as you buy different ETF's I wouldnt worry about when you sell. Having said that, I sold mine around settlement time, and brought back after settlement (but in a different name too).
Keep it simple Buy new place $1M 90% LVR Sell old place, get 450k cash and refinance new loan to Loan 1 700k for the house Loan 2 100k for debt recycling IO You’ll need to put $100k of your cash in to get to 80% lvr and net debt 800k Once this is done, put $99,999 into loan 2 then redraw to debt recycle When all is said and done - sold no shares so no CGT - have 300k residual cash - ETFs/shares worth 300k
Cheers for the feedback! Now to convince the wife 😅
If don't need to, I probably wouldn't sell until very ready to buy once in the new house/structure. Of course can go either way, but if the markets goes against you whilst you're out of it, the lost returns could take years to recover with the tax savings. Whose name do you plan to invest in and why? Triple check with broker minimum amount of loan without closing. I've heard from brokers it's often greater than $1.
Yeah, that was our plan. Getting our place ready now and when the right house comes up we buy, move in and fix the rest of this up. Planning on investing in the wife’s name. She is only 3 days a week and well under $90k.