Canna Campbell

There's a lot more nuances in this than people would realize from a surface level.

There are situations where people may not actually be able to be approved for that loan on the P&I numbers.

They can only get it approved under interest only.

Now, with interest only, just because the bank has put you on an interest only doesn't mean you follow that prescription.

You can still treat that investment loan as a principal and interest loan.

So even though my interest repayment is maybe $50,000 a year, I can still...

chip away at that loan, make them $60,000 a year and start bringing that loan down.

And that can be particularly valuable once your interest-only loan terms and conditions have expired, because then the bank looks at it and goes, well, actually, you've been behaving in a manner with your cash flow in that it's actually principal interest.

It's a very smooth transition.

And not just a mortgage broker, an experienced mortgage broker.

That's really important.

Taps into the ego, right?

I think there's a risk of being too tunnel visioned.

These negative gearing rules are just applying to residential property.

You can still negatively geared commercial property, industrial property, rural property.

So you can very much get caught up in this and think residential property, residential property only.

Of course, then there's the liquidity risk.

A property, as we all know, takes time to sell and it's very expensive.

You've got to pay a real estate agent a rather large amount of commission.

There's obviously the legal fees, bank fees.