Long time lurker here! (possibly my second or third post)
Some context: Fiancé and I are currently living in an apartment that we own. Paying principal and interest and dumping money into the offset. Fixed loan with 6 months left.
We are scouring Sydney looking for a house to purchase as we are looking to start family soon and require something bigger. We are at a crossroads with 2 options.
(a) Buy investment and soldier on by staying in the apartment for 3 years and then consolidating accumulated wealth (equity from both property and savings) to buy our dream home
(b) Buy dream house to move in and rent out apartment (or even sell apartment?). This seems unlikely as the suburbs where we ideally want to settle is hot AF at the moment
Both earning ~$180K each
Question: Regardless of which route we take, would it be wise to:
(1) only pay principal and interest and pump money into offset or savings account
(2) pay principal and interest on the fixed component of the loan but smash into the repayments of the variable component
Yes, I’ve spoken to my account, broker, friends and family but wanted to widen my research here (Dare I say that OzBargain is the most financial savvy posse in Australia? Haha)
Please sing out if you need any clarification.
Thank you all in advance!