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  • Line of credit works even faster.
    Provided you can handle floating rate and not spending equity on shiny toys...
    The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

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    • Hi
      As I thought.
      So Damap your not actually paying $50 per week off your principle only.
      Your just paying a higher repayment amount and a portion of that extra is the $50 principle over payment.

      What I am getting at is I didn't think you could just rock up to your bank and say I am going to give you $50
      per week extra and I want you to take it off my principle.
      The bank would take you extra $50 per week and a portion of it would be going to pay some extra principle and the
      rest would go on interest repayment.
      Richard

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      • Originally posted by Damap View Post
        No matter how they are structured they simply cost a lot. Best thing I ever learned from a broker was overpay the principal even by $50 a week makes a huge difference over time to total interest. Assuming you aren't so leveraged you can't find 50 bucks a loan extra to pay :-)
        You have lost me really.
        A table mortgage is just that.
        I think if you work it out they cost no more than anything else - for the same payments.
        If you pay more than the minimum (as you suggest) you will reduce the term and hence the interest.
        The 1st mortage I had was P&I 15 year term.
        I worked out what I had to pay (excel will do it for you these days - or many of the online calculators) to pay it off in 10 years.
        As suggested it meant that if I couldn't pay the enhanced payments I could revert to the 15 years.
        But if I took out a 10year term I wouldn't have had the versatility.

        Borrowing money costs!
        The longer you borrow for the more it costs!
        Table mortgages don't 'cost' more for the same term and interest rate as any other option.

        Comment


        • Originally posted by PC View Post
          Line of credit works even faster.
          Provided you can handle floating rate and not spending equity on shiny toys...
          Agreed. Gives more flexibility and enables you to make quick unconditional offers.

          Cheers

          Charlotte30
          Last edited by charlotte30; 12-01-2015, 10:22 AM. Reason: spelling

          Comment


          • Originally posted by richard56 View Post
            What I am getting at is I didn't think you could just rock up to your bank and say I am going to give you $50
            per week extra and I want you to take it off my principle.
            The bank would take you extra $50 per week and a portion of it would be going to pay some extra principle and the
            rest would go on interest repayment.
            Richard
            It should all come off the principle.
            Otherwise they are charging you more for interest than you owe.
            The way a table mortgage works is you pay a constant amount over the term of the loan.
            The interest is calculated on the principle still owing,
            this is taken out of the amount you paid,
            the rest that your paid comes off the principle.
            At the start the amount taken off the principle is very small
            but as the principle reduces the interest reduces so the amount left after the interest payment increases
            So the interest gets less and the principle reduction accelerates.
            If you make any extra payments they must come off the principle.

            Comment


            • Yes it all comes off the principal. You are already paying all the interest. LOC is way better but can be tempting for most people. I am happy to just over pay. I increase the overpayment as rents increase until I reach the 5% threshold.

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              • Hi
                Bugger I was wrong again.
                I constantly amaze myself as to how little I know
                Richard

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                • Would you be better off taking that extra P payment and instead leveraging into another I.P?
                  Pay the loans off many years later by selling down - or never pay it off.
                  The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

                  Comment


                  • Originally posted by Damap View Post
                    Funny story Bob he apparently lost his final appeal for PR recently and is now slumming it in Latin America somewhere.
                    Poor bugger having to slum it with all those beautiful woman with big diffs

                    Originally posted by Wayne View Post
                    Not a rip off - they are what they are.
                    Pay a 'table' amount regularly and pay off the mortgage by the end of the term.
                    Cause they are a rip off ! Reducing mortgage is what you need if you hell-bent on paying
                    an investment mortgage off, sure going to lessen your cashflow but that is what you
                    are doing to a lesser degree on a table mortgage.

                    The old adage of buy 20 on interest only and let the magic of time do the work for you and sell
                    10 and pay other 10 off makes more logical sense to me. An more importantly you will have
                    more cashflow to live on over the years for a better quality of life, years you can never get back.

                    I know between the two examples who will have the bigger property portfolio over the same amount of time.

                    "Smarter not Harder"

                    Comment


                    • In theory yes but after the last 6 years I just want to be rid of banks. I have enough houses.

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                      • Its the quickest way to get rid of the bank.

                        I got rid of the bank years ago when switched to using a broker - have nothing
                        to do with the conflict of interest bank.

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                        • Originally posted by iwik View Post
                          Cause they are a rip off ! Reducing mortgage is what you need if you hell-bent on paying
                          an investment mortgage off, sure going to lessen your cashflow but that is what you
                          are doing to a lesser degree on a table mortgage.

                          The old adage of buy 20 on interest only and let the magic of time do the work for you and sell
                          10 and pay other 10 off makes more logical sense to me. An more importantly you will have
                          more cashflow to live on over the years for a better quality of life, years you can never get back.
                          Now you are changing the context.
                          Your strategy is fine in some markets, crap in others.
                          But a table mortgage is still not a rip off, it is still what it is - a table mortgage.

                          Some people just can't look past themselves!

                          Comment


                          • You know this is another troll right Wayne? He talks nonsense.

                            Comment


                            • Originally posted by Wayne View Post
                              Now you are changing the context.
                              Your strategy is fine in some markets, crap in others.
                              But a table mortgage is still not a rip off, it is still what it is - a table mortgage.

                              Some people just can't look past themselves!
                              Originally posted by Damap View Post
                              You know this is another troll right Wayne? He talks nonsense.
                              Is that how you two have a discussion - put the boot in when you look
                              to be on the back foot - does the truth hurt ?

                              Damap I thought you were the troll the way you have followed me round
                              being a "dentist" teeth puller - your card is marked !

                              Comment


                              • Originally posted by Damap View Post
                                You know this is another troll right Wayne? He talks nonsense.
                                I think iwik is OK but PT is having a laugh surely?
                                Squadly dinky do!

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