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Offset account for Investment property?

Discussion in 'Property Finance' started by Troypl, 16th May, 2016.

  1. Troypl

    Troypl New Member

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    16th May, 2016
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    Sydney
    hi,
    This is my scenario, just changed banks to a pure investment loan covering 535k, will be moving out and living with parents while I save for another home (PPR). Now I have about 70k of savings and adding to that at the rate of about 5k each month. QN, with a rate of 4.14 Percent and a rent of 750 week I will be slightly positive geared, now with my savings in the account I will be really positively geared, should I keep as this will make me about another 10k a year in savings? Yes I understand I have to pay tax on this but the way I see it, that is income so I will still be making money rather than not?

    Thanks guys
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    You should keep your cash in the offset account unless you can find another place where it can generate more than 4.14% return.
     
  3. Troypl

    Troypl New Member

    Joined:
    16th May, 2016
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    Location:
    Sydney
    Yea, if I want quick access to this cash I would think leaving it the offset account attached to the IO investement loan would be good as it it's basically increasing the amount of positive cash flow. That way I can take it out at any time and still have the original loan of 535k as deductible loan.
     
    Terry_w likes this.
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Investing in the safety of your own mortgage can be a good thing.

    For those with non working/low income spouses, cashflow analysis may show that they are better off placing that cash into a TD et al, thus paying no / little tax.

    ta
    rolf