Hi,
So, I have a mortgage on a unit which is now an investment property. I also have some savings in Raiz/Acorns. I also live in Australia.
Aside from everything bad people will say about Acorns, it was an easy way for me to put money into ETFs and a good learning opportunity.
The savings goal was long term for another mortgage on a larger family home. Looking at saving over a period of ten years to get enough for a deposit, approximately $70k.
The mortgage on the unit is interest only, at the moment I can't afford to service the loan on interest & principal repayments. The rental income almost breaks even, last FY it was only $200 negatively geared. The mortgage also has a redraw facility so this is where my rental income lives to offset interest. So, this loan isn't reducing very quickly, maybe at a rate of about $100 a month is paid off the principal (or rather, is in redraw). I pay the other expenses with my own cash - council rates and body corporate.
Am I better off to be putting my savings into my mortgage redraw where it can offset interest (and, get the property positively geared quicker), while I increase my income from work to where I can pay principal & interest?
Or, am I still better to leave my savings in something like ETFs? (I have enough that I could look at minimum investments with a proper brokerage such as CommSec etc)?
I feel like I should pour everything into the mortgage, as having that debt costs probably more than the returns from an investment.
Can money in redraw or equity in property be used as a deposit for a loan, or be used to show the proof of savings? I would consider selling the investment later when I'm in a position to start applying for finance for another home. But, not at the moment, the rental return is good and property market here seems pretty slow..
Thanks for getting this far!
tl;Dr am I better to put my savings money into a mortgage redraw account or an investment like ETFs?
Submitted February 10, 2019 at 05:42AM by zirophyz http://bit.ly/2TGzxbz
