Chris Bates
speaker
1,659 appearances
5 recordings
1 series
first heard Jun 2021
last heard Dec 2022
Chris Bates’s voice in public audio — every appearance, attributed to the second.
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Appearances
And, you know, the rates spiked when Trump got in and then they dropped right back down to under 4%.
No one expected what was going to happen.
Anyway, that break fee was like $35,000 because rates have fallen so much.
It's unlikely to get those sort of break fees now because rates are already so low.
But that's, you know, you can get huge break fees, especially if the fixed term is a long term, like five years, then your break fee compounds.
Being a financial advisor for 13 years, we don't do that in-house anymore.
But offset accounts are one of the most powerful tools that you can have access to because what they do is they link it to your home loan.
So let's say your home loan's the big numbers, but let's just say easy, a million dollars, and you've got $100,000 spare cash because you can put that into an offset account, offsetting your mortgage.
And so you're only paying interest on the difference, which is say $900,000.
So you're not paying any interest on that $100,000 because it's in an offset account.
But if you decide tomorrow, look, I want to do a renovation that's going to cost $50,000, then you can just take it out of your offset.
The other reason why I'm a big fan of offset accounts is really with tax, it's really important to understand what your tax deductible limit is.
is what you can claim when you do your interest sort of in your tax return.
So you've got to be very careful paying down property loans just by paying them down because what you're actually potentially doing is reducing your future tax deductible debt.
And so a lot of people don't realise, let's say there's a first time buyer, they buy an apartment and it's $500,000 and they get a loan of $400,000.
You know, common sense drilled into you, debt is bad, pay off debt.
Well, that person with that apartment might smash their $400,000 down to $300,000 to $200,000 because they bought within their means and they saved really hard.
But when they decide to upgrade and buy a house, because they're paid off that property, they're paid off their tax deductible debt.
And then if they want to buy a house, they've got to borrow a lot of money for their new house, which is non-deductible.
So that's another big reason why offset accounts are really good.
Showing 1241–1260 of 1,659 · page 63 of 83
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