We have a home in Canberra worth about $1.2 million, in return we have about $500,000 in fixed loans and $100,000 in variable rate loans, the latter offset by $70,000. We are about 50 years old with a total of about $900,000. Our financial situation has changed recently due to a generous inheritance. Next year, we can pay off our mortgage with funds from the property. But does this make sense? By allowing the loan to continue, we will have more options in the future as we can turn our current home into an investment property and use the property funds to buy a home that better suits our future needs.
You’re right in that, if you’re planning to buy another main residence then there may be advantages to holding a large loan on your current home so the interest can be deducted when you move in. This also allows you to put as much equity as possible into your new home where no mortgage is deductible.
The trick is that if you inherit your existing mortgages and then take out a new loan to buy a new home, the interest cannot be deducted because you’re investing the money in a non income-generating asset. .
However, depositing money into your existing mortgage offset account has the same mathematical effect: no interest, but now the money remains yours and can be withdrawn without creating a new loan. In this way, when you withdraw your money to buy a new house and rent your old house, the interest on the old housing loan becomes deductible.
Although you can deduct your variable loan, many fixed loan providers do not allow them to be tied to offset accounts or early repayment without a hefty interim fee. In such a case, request an equalization and get a quote for the break fee. However, you may find it cheaper to wait until it’s due before transferring the fixed loan to a variable loan and offsetting it until you buy it elsewhere.
My wife reached the super protection age of 59, having been born in the second half of 1963. He has a $280,000 Vic Super account and a $90,000 Commonwealth Super account. He plans to stop working to complete his doctorate in about a year and then start again. He wants access to his $250,000 salary to pay off most of our joint mortgage. In this way, our living expenses will be at a minimum level and he will be able to complete his research full-time for about a year, as he is no longer paying a scholarship from his university, as he is at the 7th grade.pearl year. Since both of his parents have recently died, he will inherit about $250,000 as his share of the estate. Once he inherits it, he plans to give it back to his supervisor, using the three-year ‘bring-forward rule’ as an uncompromising contribution. What are the rules for withdrawing supervisor after reaching your retention age?
Basically, you can retire and withdraw your super benefits once you reach conservation age (from 55 for anyone born before July 1960, gradually to 60 for anyone born after June 1964). But there are a number of potential pitfalls.
Until you’re 65, you’ll need to confirm that you’re permanently retired, but you can change your mind later, which makes confirming pretty pointless.