My partner and I are living in our rental atm which we will stay in most likely for 3 years and maybe more. We will look at buying more rentals in 3-5 years so will be great to have access to funds around this time
The mortgage on this rental is $396,400, value 700k
We currently have 280k which we currently have in a savings account not making much interest.
We could put this money into a term deposit with ASB for 9 months at 3.6%. After 9 months it will $285,464 after tax so it would have increased by $5464 over 9 months
1) How can i compare the savings if i paid off the loan instead of having the money in a term deposit after 9 months? currently on floating so instead of the mortgage being $396,400, it will be $116,400. We are paying p&i with ANZ, 4.64% floating
2) Which would be better to do? term deposit gives us more flexibility but we already have 342k as revolving accounts so having 280k in term deposit and 342k revolving accounts might be excessive to have and we will pay more interest then what we need to
a) 342k revolving account, 280k term deposit and $396k mortgage
b) 342k revolving account, $116,400 mortgage
3) If we go with option b and then decide to rent it out, the property will be positive by a long shot so will be paying quite a bit of tax? can we take the money out later and the extra interest we need to pay will still be tax deductible?
The mortgage on this rental is $396,400, value 700k
We currently have 280k which we currently have in a savings account not making much interest.
We could put this money into a term deposit with ASB for 9 months at 3.6%. After 9 months it will $285,464 after tax so it would have increased by $5464 over 9 months
1) How can i compare the savings if i paid off the loan instead of having the money in a term deposit after 9 months? currently on floating so instead of the mortgage being $396,400, it will be $116,400. We are paying p&i with ANZ, 4.64% floating
2) Which would be better to do? term deposit gives us more flexibility but we already have 342k as revolving accounts so having 280k in term deposit and 342k revolving accounts might be excessive to have and we will pay more interest then what we need to
a) 342k revolving account, 280k term deposit and $396k mortgage
b) 342k revolving account, $116,400 mortgage
3) If we go with option b and then decide to rent it out, the property will be positive by a long shot so will be paying quite a bit of tax? can we take the money out later and the extra interest we need to pay will still be tax deductible?
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