Thank you Wadiman. So what do you do when the offset equals the remainder of the loan? Did you pay it off completely or do you just keep the money in the offset and keep paying the mortgage?
I had a full offset for 5 years against my PPOR while I procrastinated what to do. It was going to be a house deposit for when I get married, have babies yadda yadda, but since that hasn’t happened I bit the bullet, paid the loan down to 2c, and am redrawing it to buy shares. Paying it down to a sufficiently small amount and reborrowing it has now changed the purpose So I can claim the interest on tax, without the problem of it being a mixed purpose loan.
Can’t sit around waiting for life to happen... I’ve lost years of potential investment earning by not doing this sooner.
Thank you
@marty998 . I’d like to learn from your hindsight. Is it ok if I PM you for more details, unless you’re ok explaining what you did here? I’m a bit slow with this stuff and need the steps broken down to understand it.
From what I am reading, you:
1. Had an offset account, and put in enough money to equal what you owed
2. You left it like that for an additional 5 years
3. You then paid off the loan entirely except for 2c (not sure if that’s really 2 cents of something else?)
4. But when you paid off, you actually put that money in a redraw account, so you could access it
5. You then pulled money out of your redraw account, used that money to buy shares
6. Because of using the money for shares you’re able to claim the interest (of the PPOR or shares?) on your taxes for a deduction
Happy if you could sort my understanding. If you had to do all again, knowing what you know now, what would be your steps and strategy? I definitely want to learn from people and don’t know anyone who is mustachian strategic with money here.
Big thank you in advance for any insights and sharing your experience.