Extra Repayments or Extra Money Offset - PPOR

Discussion in 'Loans & Mortgage Brokers' started by property world, 16th Apr, 2020.

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  1. property world

    property world Well-Known Member

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    Hey guys

    In regards to our PPOR

    We've got 100% offset against our loan but I'm wondering if there is any benefit financially between

    - Paying off our loan quicker (Extra Repayments)
    Or
    - Keeping that money and just putting into our savings so it's Offset against the loan

    Thanks
     
  2. Trainee

    Trainee Well-Known Member

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    Liquidity.

    Tax consequences depending on what you use the money for.
     
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  3. Lucki

    Lucki Well-Known Member

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    I would keep the money in the offset if I am still entertaining thoughts of future investments, tax deductions etc. What are your future plans for yourself and your PPOR?
     
  4. Trainee

    Trainee Well-Known Member

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    why?
     
  5. Lucki

    Lucki Well-Known Member

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    Use the money in the offset to pay down the deposit for the next purchase rather than a new application?

    Convert the PPOR to Investment property, and if you hadn't paid down the principal (instead used offset) then you maximize your tax savings?

    Plus the liquidity fact you mentioned earlier.
     
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  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You would be saving the same amount of interest either way, but get extra flexibility with the offset approach
     
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  7. Rugrat

    Rugrat Well-Known Member

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    We do both. It helps my sleep at night factor knowing I can take a repayment holiday if needed with the extra paid on the mortgage, and I don't touch it once its there because its already 'spent' in my mind, so I am not tempted to touch it. But I also have saving in the offset that we can access and use for further investment or whatever.

    It may not be the 'reccomended' or the best approach for financial success, but it works for us.
     
  8. shorty

    shorty Well-Known Member

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    I would keep the cash. More options, as long as you are reasonably disciplined and don't fritter.
     
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