buy or sell - help?

hey all, we're a family of 3 from Vic and are renting at present on a single income (40yo earning 160k/yr). We are renting as the avg.price of a 3bd in this school zone is $1.4M, so renting is economical in the short term ($500/wk)

• We have an IP valued at $700k with an outstanding mortgage of $100k. Bought in 2013.
• Due to the lockdowns our savings have increased and we have around $120k saved.

We want to expand our portfolio, we looked at buying into the local area but the loan amount exceeds our cap.
Would it be better to use savings to pay off the mortgage on our 1st IP and then buy a home in the local suburb using equity as we would have a higher deposit? Or are there other financial methods that may be more economical? Or should we keep renting here and payoff the mortgage then use equity to buy IP in other states?

I'm not fully across all the losses/gains but I know if we sell we will pay CGT and lose some of the value which may not be the case if we paid off the mortgage and used equity.

 

Welcome @Parakeet10
You certainly do have a LOT of reading to do !
Single income of $160k is well above average
CGT and your mortgage have nothing in common
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