Paying Off PPOR

Hi all,
Just wondering what people’s thought’s are about the benefits in paying of a PPOR loan if you have sufficient funds sitting in an offset account and current scheduled repayments will have it paid off within 12 months anyway.

I don’t feel I’d ever treat it as an investment property and would ultimately sell I I was to upgrade within 12 months.

Cheers

 

If you pay it off instead of keeping the money in the offset, it means that you can no longer use that house as an IP and tax deduct the interest.

In regards to why you should do - you really need to say what your plans are to get any advice.

If you have no plans - just keep money in offsets as it effectively means you have no interest but you still have access to all the money without another loan approval.

 

do you have any investment debt? If so is the rate higher than your home loan?

 

What do you see as the benefit? Cant see any myself.

 

Yeah, certainly one benefit, being able to access a heap of money if I needed it without begging for it. Noting I’m also 22 years ahead with my repayments.

Yes, I have investment debt too. And it is at a higher interest rate.

The major one I can think of is, psychological. Knowing the title is with me and not with the bank.
(Point taken though, I could have asked what people feel are the benefits)

 

Then its personal and emotional, not logical. Who cares if you hold the title? Try not paying the investment debt. Everything is still up for grabs.

 

You could be saving interest if you don't pay it off.
Seek tax advice after reading this:
Strategy: Borrow Against the Main Residence for an Investment Loan (Shuffling Loans Around) Strategy: Borrow Against the Main Residence for an Investment Loan

and

Strategy: Don’t Keep Large Sums in Offset Accounts Strategy: Don’t Keep Large Sums in Offset Accounts

 

I assume it's only a small amount in the offset given it will be paid off in one year? If it were me - I'd just pay it off and crack open a beer to celebrate. Congrats on paying off your home!

If it were a larger amount in the offset then I'm sure there's 101 different/complex strategies you could adopt to leverage the funds.

Cheers

Jamie

 

If you had say a $500k mortgage and $500k sitting offset meaning the loan amount every month was 100% principle then I wouldn’t pay it off, I’d just let it tick away. There’s no net advantage and you never know when you might need access to money quickly.

- Andrew

 

That was what we did with our PPOR: keeping the fund in offset account and changed to interest only, so we did not pay any interest but had the flexibility to withdraw fund from offset.

 

Its safer with bank than with me