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Should we refinance or sell our investment property to pay off our mortgage?

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Dee | 06 Jan 2013, 03:39 AM Agree 0
Hello, we have a mortgage of $250,000 which we are having problems reducing. We have an investment property in Gladstone that has probably increased in value approx. $200,000.
We are now in our early 50's and would really like the security of not having such a large mortgage. Just wondered if anyone could offer an opinion or advice if possible?
Thank you, Dee
  • Eos Property | 11 Jan 2013, 11:16 AM Agree 0
    Without knowing the full details of your situation it is hard to comment fully. Based on the numbers provided your could make some serious inroads into your mortgage by selling your IP and using the profits to pay down your existing mortgage.

    If this is a serious option, when doing these calculations make sure you factor any CGT liability into your figures.

    Other, less dramatic, options you may wish to explore are;
    1. Converting IP loan to Interest Only and re-directing savings into your existing home loan. Or better yet into an offset account linked to your existing mortgage.
    2. Getting a depreciation report done to maximise tax advantages of your IP.
    3. Investigate submitting a PAYG Tax Variation to reduce your pay period tax with tax savings being redirected into your existing home loan/offset account.

    Whichever way you go make sure you also consider the longer term picture. While making some adjustments now will help with your existing mortgage - you also need to consider your future beyond your mortgage and working life.

    Hope this helps.
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