Loan Structure

Hi all,

I'm about to purchase my first IP in Brisbane for $435k which rents at 450pw. My income is 80k, and because I live with my partner and am lucky enough to not pay rent I've been able to save enough to comfortably put down a 20% deposit - but I'm not sure what the best strategy would be.

Since I don't have a mortgage of my own or any debts, would it be best to do a P+I loan and pay it off as fast as possible by also contributing extra to an offset while interests rates are low (and until I know what I want to do financially next)?

Or should I go with 10%, LMI, interest only with offset for maximum deductions?

I can't say where I'll be in 5 years, but it would be nice to be in a position to buy another IP or PPOR then. PPOR because I have $20k salary sacrificed into super for FHSS before I met my boyfriend and moved in, hah. We would like to keep finances separate for now.

Thanks

 

If you want to see how many INV you can purchase by borrowing 90% Inc LMI then you should get a broker to run the scenarios for you to see what your borrowing capacity is.

If you can only afford 1 property and no more room to borrow then there's no point in paying LMI.

 

If you pay LMI now you might regret it later if you don't invest further. On the other hand if you buy a main residence later it might be better to have more cash..