澳洲Australia property How much deposit to pay? | Sydney
在澳大利亚 The pool at of an IP needs to be resurfaced (or so the pool doctor says), the cost was estimated to be $10K ($10,000), after recoverying from my impresssion of a cat coughing up a fur ball, it just seems far too much. Its just a standard poo I need some advice regarding a property purchase. Property - semi-detached house Bedrooms - 2 Condition - average needs internal reno to modernise Street - one of the best in suburb Location - excellent Close to schools - yes Transport - 50m
We are buying a PPOR which we intend to use as an IP after 3-4 years. We are thinking of using the FHOG for this property and will be servicing an interest-only loan with an offset account.
For all those property pro's out there, there are two questions I have been pondering on:
If eventually the PPOR property is going to be an IP, should we put a deposit of 20% and take a loan out for 80% of the value of the property (to avoid LMI)? Or is it best to take out as much loan as we can (i.e. 90%) and pay LMI for the 10% above 80% (since eventually, the interest on the 90% will be tax deductable).
Thank you for all your ideas.
hard to say.
Id say look at 90 or 95 % , but depends on the amount of loan and what your future and current needs actually are
id say get the max amount you can now and store the reserves in the offset so its like you only borrowed 80%...then you have the reserves for later...
Thank you Rolf and Joshy.
Say for example, I take out 90% as you have both suggested. Am I correct to assume that the LMI won't be tax deductable if I have this property as an IP 3 years later?
The reason why I am asking is due to the way banks want LMI to be paid:
1. NAB wants an up front payment. Hence, if the LMI cost was paid in this financial year, I'm presuming that I won't be able to claim tax deductions on it when I move out of this PPOR and have it as an IP 3 years later?
2. ANZ wants to put the LMI cost into the loan. Hence, over the next 30 years, I will be paying interest on the LMI cost. Obviously the interest I pay on the LMI cost once this property becomes an IP 3 years later will be tax deductable.
Do respond to the above questions as soon as possible if you can as I will either be heading to NAB or ANZ tomorrow
Thank you very much. Appreciate your thoughts.
there are 2 separate issues to your q
1. The premium itself is depreciable over 5 years or the life of the loan if an IP , its termed a borrowing cost.
2. Lets say the lender allows you to add the cost of the LMI to the loan We call this LMI capitalisation. the Interest on this is deductble if and when the property becomes an IP.
In the case of ANZ make sure they dont sell you a puppy. You want their Standard Variable loan under their pro pack so u can have the offset. You dont want their Simplicity PLus loan for this application.
I think u will find the ANZ premium a little higher than the NAB one.
If you do go the ANZ route the advantage is that your debt will be 2 % ish higher when you move out, and you shouldhave 2 % ish more in ur offset account.
Assume for a mo, the rates are equal ( and ANZ are doing and can afford pricing) then either then NAB or the ANZ will be the same interest costs even though the ANZ loan will be 2 % ish larger.
This is because instead of you paying the LMI out of pocket as with NAB and Westpac, you add it to the loan,and have that offset by the money you havent spent.
re the LMI, as rolf said its depreciable over 5 years - straight line method, so if you move out after 3 years, you can claim 1/5th of LMI in year 4 and 1/5th in year 5.