Hi All, I have been reading up a hell of a lot, especially @Terry_w 's stuff, and I thought I had enough knowledge to then approach a mortgage broker. I had a chat with her just then, and she's going to send through information about it all this afternoon.. but I wanted to see what everyone else thinks, as some of it appears to be completely against what Terry_w has said (especially in terms of cross collateralization). My current situation: - PPOR has been valued by bank at $1.1m ($1.375m by REA). - PPOR has $700k mortgage with $45k in 100% offset (655k owed). - PPOR is currently with Mortgage Ezy, variable rate at 3.94% (refinanced to them 6 weeks ago). - There is an opportunity for me to sell PPOR for substantially more in 12-18months. What I'm looking at: - Investment in Kallangur QLD for <$340,000 (I've found what I want and want to make an offer). - Rent appraisal is $320-340/wk. What the mortgage broker has found to 'suit' what I need: - Refinance PPOR with Newcastle CU fixed @ 3.99% fixed for 2 years(Loan 1) *No offset, being fixed* - Get a 105% loan with NCU fixed @ 3.99% for 2 years (Loan 2) *No offset* - Loans will be cross collateralized - She suggested that I up my PPOR mortgage by $21k, so that I can use that $21k + $45k in offset to have a 20% deposit for the IP, thus no collateralization. (This defeats Terry_W's suggestion of NEVER USING CASH). - Fee's im looking at will be $795 to exit Mortgage Ezy, and $850 to join NCU ($1645 total). What I believe I need (explained to broker): - PPOR mortgage (PI) with 100% offset - Split IP mortgage (IO) > 80% secured by IP > 25% secured by PPOR - All rent from IP goes into PPOR offset - All spending for IP comes out of PPOR offset (or linked credit card) Can someone please confirm that I am on the right track, and whether what the broker is offering is good enough? If my math skill serves me correctly, I'll be far better off having an account with an offset (at a higher rate of around 0.19%), than having no offset over the next 2 years. Hopefully this all makes sense. I need to get it sorted so I can make an offer.