Hi OZB Family,
I need your advise/ideas if I should fix my home and investment property loan
Currently:
Owner-occupied 433k left with 2.79% Variable with ANZ offset account 56k currently
Investment property 337k with 3.22% Variable with ANZ
Thanks
What to Do with My Home Loan and Investment
billy12345 on 19/05/2020 - 13:14
Last edited 19/05/2020 - 14:04 by 1 other user
Last edited 19/05/2020 - 14:04 by 1 other user
Comments
repayments on an investment $1565 Rent $1540
Repayment on loan is not tax deductible, interest on loan is, and it works out to be around $904.28 per month in your case.
But that's not yet the whole picture, you'll have to add insurance, land tax, maintenance, council and water rates, to know your gearing.
Which loan is the offset against?
How much would you save in a year?
Offset with Home Loan
Hard to tell how much I will save maybe 15 to 20k ?
Based on that; what I would look at is:
1) Fix investment rate for lowest rate possible. Period depends on what you are most comfortable with.
2) Partially fix home loan for $300K and the rest variable with the offset account. This is based on how much you are capable of saving for 3 years - that plus a bit more in variable so you can still reduce your interest payments with extra savings.
You have decent rates… here are mine for comparison with NAB.
Owner-occupied 600k left with 2.93% Variable with NAB
Investment property 350k with 3.61% Variable with NABDo what you think is best. Change depending on your circumstances.
Owner-occupied 433k 2.79% Variable with ANZ offset account 56k currently
Change to 333k 2.19% fixed for 2 years with 100k in variableInvestment property 337k with 3.22% Variable with ANZ
Change to 2.49% fixed for 2 yearsThis is with the ANZ Breakfree Package.
Whats the comparison rate for the above for Owner and Investment?
4.00% and 4.53%
I have never had a customer take a loan of 150k over 25 years.
Most clients change lenders ever 2-7 years so comparison rate is useless.Do your own comparisons.
Mate they are amazing rates, i would split my owner occupied and pay bare min to investment to claim the interest. Fixing will save you around 2-3k but that before tax. So need to do a bit of calculations.
Depends on your future plans
If u have no plans to sell or move in the next 3 years, I would at the very least fix your investment. U may also want to fix a portion of your owner occupier, keeping the variable amount to how much u think u can add to your offset (ie save) over the next 2 or 3 years
Depending on your risk appetite, u could also just fix 80 to 90 % of everything and invest most of your savings into something that yields >4% over the longer period. (not financial advice!!)
Everyones circumstances are different
OBs are not licensed to provide financial advice
Best to discuss with your financial advisor or bank,,Just remember
Whatever you do, the bank never loses.
If fixed rates look good it means rates are going to drop.
If fixed rate loans are very limited or hard to get or unattarctive then rates are going up.
Beware any penalties as well.rates are fine so really i'd focus on the investment and what your plan is over the next few years. Certainly ANZ have very sharp 2 year fixed rates for eg (took one myself) if your plan is to hang on and pay interest only for the period.
Is your investment positively or negatively geared?