I saw this in the Age today. Is it really possible for people to be this leveraged up? WOW, I am not sure that I could sleep at night if this was me. At least they got a sensible reply, suggesting that they do a 7% interest rate stress test on their mortgage debt. They also were advised to sell one of the properties and reduce debt. What do you think of this situation?
Q. My wife, 28, and I, 30, have annual incomes of $100,000 and $120,000 respectively. We live in a property we bought for $900,000, now worth $1.1million with $809,000 owing and $480,000 in our offset account.
Our other investments consist of two townhouses (worth $2.7 million, with $2 million owing, and are returning $1300 and $1350 a week respectively) and an apartment (worth $520,000 with $460,000 owing and is returning $540 a week). Both are on interest-only loans. In our superannuation, I have $100,000 and my wife $40,000. My wife also has $25,000 in shares. We have no other debts.
We maximised the amount of salary packaging. What is the best way to make the most of our wealth as we probably need to build some savings to prepare for children in the next few years? We would also want some passive income, should one of us be unable to work. A.N.