What’s negative gearing?
A property is negatively geared when the costs of owning it – interest on the loan, bank charges, maintenance, repairs and
capital depreciation – exceeds the income it produces. Simply put, your investment must make a loss before you can claim a
tax benefit.
What’s positive gearing?
You can also positively gear a property. This occurs when the investment income exceeds your interest expense (and other possible deductions). Note that you may be subject to additional tax on any income derived from a positively geared investment.
Can I use the equity in my home as a deposit?
If you have owned your own home for a few years, you could have built up quite a bit of equity in your property. Instead of
finding a cash deposit to buy an investment property, you can use this equity as the deposit.
How will refinancing benefit me?
Refinancing can be a smart way to manage your money. By obtaining a lower mortgage interest rate, you may lower monthly
payments. When you refinance to lower the interest rate you have to pay, you can significantly reduce your monthly mortgage
payment.
I have a lot of credit card debts and personal loans. What is the benefit of consolidating?
By consolidating various smaller debts like credit cards or personal loans into one large debt, you may be able to reduce interest
rates or lower your monthly repayments. Plus you only have one loan to keep track of.
What is a Line of Credit?
A line of credit is a facility that allows you to withdraw and deposit money directly into your home loan. You only ever get charged
the interest on the balance that you owe, not on the facility limit. For example, you may have an account or loan limit of $300,000, but you may only owe $ 150,000. This means, that you only get charged interest on the balance, being $ 150,000. The
benefit of a line of credit is that you can have your income placed directly into your home loan, therefore reducing the interest
cost on a daily basis, and you have immediate access to your funds.
