Use equity or not?

Hi all. Was hoping for some advise.
Currently have mortgage on PPOR with equity of 270k. Repayments are 180 per week.
My combined income is 1900 nett per week. We are looking to purchase in Brisbane at around 650k. We can rent our PPOR for 500 pw.
Considering the current economic environment should We sell PPOR and use as deposit to save interest and large repayments or rent out and use equity in existing property. Cheers.

 

This is a common question.

have a read of this with some alternative strategies

Strategy: 11 Strategies for when you move out of the PPOR and keep it
Strategy: 11 Strategies for when you move out of the PPOR and keep it

 

Whats your opinion of the current economic environment?

 

Just thinking of the possibility of future rate rises.

 

thanks

 

Keep in mind you could also sell later too.
Potentially sell tax free at 5.5 years later so you could get some more tax free growth squeezed out.

 

What about your future asset / income needs?

More exposure means more gains, more losses or more interest if or when rates go up.
Less exposure means less gains, less losses or less interest (relatively) if or when rates go up.

What is your priority?

 

Yes Terry was thinking that. Thanks

 

Don't sell, rent PPOR (especially if it's in a good area). Refinance, buy and expand portfolio base. Keep growing the base.


All depends on financial position, risk tolerances and goals.

 

PPOR has had 55% growth in 5 years with rentals going from 250 to 450 plus. Postcode 2630 is booming with the Snowy Hydro project with very limited accommodation available and properties selling within 2 weeks and approx 4000 plus workers in the area for the next 5 years. My only concern is prices going backwards after the project is completed.

 

Can't comment regarding the area and long term fundamentals.

If you decide to sell, make sure you have a solid plan to put the capital to better use to get you closer to your financial goals.