Canna Campbell

And then think of it as a form of a responsibility.

It's a repayment to a certain degree.

But also, a lot of people don't realize this will impact your credit score.

So, it will then impact your ability to borrow and how much you can borrow.

So, if someone is thinking of looking at, say, moving home and upgrading the home or perhaps looking at a debt recycling strategy or perhaps looking at buying an investment property and is planning to take a new loan out...

A $50,000 EV on a novated lease can potentially reduce your borrowing capacity by up to $150,000.

Now, yes, again, we always get a mortgage broker and speak to the mortgage broker before you go and do this, but that's something you don't want to discover.

When you go to borrow money to buy a property or to look at debt recycling, and originally you were planning on doing this at this price point, but suddenly your budget gets cut down significantly because of this one decision you made three months ago, six months ago, a year ago, that you're kind of married to for the next two to five years.

Yeah.

A lot of people don't really understand the fine print behind these agreements.

And this is the problem.

It's like you're getting something for nothing.

You're getting a $50,000 EV and you're thinking you're doing all the responsible things because it's going to save your budget, save your cash flow.

But there are a lot of consequences.

Absolutely.

So particularly people who are looking to refinance as well, not necessarily taking on new debt, but refinancing.

you want to check this with your mortgage broker before you go and do this.

Yes, of course.

But then there are actually bigger ones, more serious ones.

So, you know, with the fringe benefit tax, I know, well, this is why I'm so glad we're doing this episode because normally I would err away from this topic being a depreciating asset that provides, you know, very little benefit.