Offset account for Investment property?

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

 

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

 

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.

 

I agree with Terry - keep the cash in an offset and use to cover the depost/costs on your next ppor.

This blog entry is sort of relevant to your situation - Pass Go Home Loans - Interest Only with offset account structure

Cheers

Jamie