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  1. #11

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    Quote Originally Posted by Anthonyacat View Post
    In my above example there's certainly a tax deduction. It would come about by borrowing to invest. In this case, investing in Kiwisaver.

    Doubting your solution of putting it in an offset account would be allowable by the Kiwisaver people. They want it used for the purchase. Of course, you could use the Kiwisaver money for the purchase, and use a different $60k an an offset account...

    Regardless of the purpose for borrowing, I'd consider making the minimum possible deposit and borrowing the maximum amount your bank will lend, simply to bump up any cashback incentive. You can always leave the money sitting in an offset account, or simply pay the loan down a couple weeks later.
    Great ideas thanks. Out of interest what is the cashback incentive?

  2. #12
    Join Date
    Oct 2013
    Posts
    1,620

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    It's like an anti-application fee. For the last 5 years or so (maybe a bit longer) the banks have been paying people to take out mortgages.

    It's dropped a lot in the last few months, but last year you could count on around 1% of your loan back in cash. I've just borrowed $500k from ASB and got $1,800. In the process of borrowing another $480k from Westpac who are giving me $2,800. Talking to BNZ about another $300-400k, but they're dragging their feet and won't tell me what they'll give me.

    Kiwibank currently offers a holiday to a pacific island, I think. ASB used to offer a TV. But mostly it's cash. And generally speaking, the more you borrow, the more cashback.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.

  3. #13

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    Quote Originally Posted by Anthonyacat View Post
    It's like an anti-application fee. For the last 5 years or so (maybe a bit longer) the banks have been paying people to take out mortgages.

    It's dropped a lot in the last few months, but last year you could count on around 1% of your loan back in cash. I've just borrowed $500k from ASB and got $1,800. In the process of borrowing another $480k from Westpac who are giving me $2,800. Talking to BNZ about another $300-400k, but they're dragging their feet and won't tell me what they'll give me.

    Kiwibank currently offers a holiday to a pacific island, I think. ASB used to offer a TV. But mostly it's cash. And generally speaking, the more you borrow, the more cashback.
    Thanks

    Do you use a broker or do you just go direct to the banks?

  4. #14
    Join Date
    Oct 2013
    Posts
    1,620

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    Used to go direct. Currently using a broker. But some banks don't work with brokers, so at some point may need to approach direct again. Then again, this most recent purchase may be enough for a while. Am satisfied with 'enough', not much desire to build an empire.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
    Lower fees for investors, traders & real estate agents!
    [email protected] for more information.

  5. #15
    Join Date
    Sep 2013
    Location
    Auckland
    Posts
    3,885

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    Like others have commented, I would strongly suggest you use your KS money for deposit.

    Saves interest costs and allow you to pay off mortgage a lot quicker.

    Also so having equity in your own home gives you far better control and options in how you invest your equity in the short medium long term future.

    Having KS managed by someone else is risky in terms of control.

    PS use a mortgage broker to help you.

  6. #16

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    Quote Originally Posted by Gary Lin View Post
    Having KS managed by someone else is risky in terms of control.
    Nearly as risky as taking advice from some fly by night cowboy

  7. #17
    Join Date
    Jun 2013
    Posts
    2,116

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    Quote Originally Posted by Gary Lin View Post
    Having KS managed by someone else is risky in terms of control.

    PS use a mortgage broker to help you.
    What control do you have over your home exactly that isn't there for KS? You have already mentioned you need a mortgage broker, that isn't taking control now is it?


 

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