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offset account with IP?

Discussion in 'Property Finance' started by arorah, 13th May, 2016.

  1. arorah

    arorah Member

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    Hi Guys,

    Need your opinion. We will soon be converting our PPOR inot an IP and moving into a rental accomadation. Since we wont have a PPOR to have a offset a/c against, is it advisable to have an offset a/c with investment loan in this case?
    TIA
     
  2. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Even more important to have an offset account. It keeps non-deductible savings separate from tax deductible debt. You definitely don't want to mix the two.
     
  3. arorah

    arorah Member

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    Thanks for your response Peter. I am sorry i am new to all this terminology. So just wanted to clarify, to avoid making a rookie mistake. If i have a offset account with an IP loan, doesnt that mean i am mixing non deductible saving with a deductible loan?
     
  4. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It's generally ok to transact from an offset account. You find yourself in trouble if you pay extra into an IP loan and redraw from it for personal use.

    Cheers

    Jamie
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  6. arorah

    arorah Member

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    makes se
    makes sense now. thanks Jamie:)
     
  7. arorah

    arorah Member

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  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    No, that's the whole point of the offset account. It keeps your savings separate from the loan.
     
  9. arorah

    arorah Member

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    Thanks Peter, i undertsand it now.