Mortgage Minimisation Strategies: 3 To Consider
As the Australian population moves away from the traditional full documentation mortgage, they move toward others such as the low doc, variable-rate, and investor home loans. These loans skip the fixed rates and predictability of the traditional mortgage. Those who opt for variable-rate mortgages experience the ups and downs of interest rates. However, strategies to leverage against increases exist. They also help keep interest rate costs down.
Homebuyers who opt for variable rate loans can use mortgage minimisation strategies. They include three options:
- Linking a credit offset account
- Purchasing a negatively geared property
- Purchasing a positively geared property
Non-bank lenders such as Mortgage House have pioneered these strategies. They allow clients to become homeowners. They also allow investors to maximise their profits.
Linking a credit offset account to a mortgage reduces the principal. By reducing the principal mortgage amount outstanding, the borrower pays less interest rate charges.
Those who purchase a negatively geared property aim to reduce their taxable income. Since the property costs more to maintain, it counts as a loss for the owner.
Purchasing a positively geared property works for lower-income earners. Since the costs to maintain the property take most of the individual’s income, it minimises it.
Mortgage House works with clients interested in investing or buying properties as owner-occupiers. In addition to these strategies, we offer an array of loan products.
Mortgage Minimisation Strategies Conclusion
For more information about mortgage minimisation strategies, contact our Mortgage House team. Our loan specialists know to walk each applicant through the best minimisation strategy. When you’re ready to refinance your home loan, we’re here to help too.