After a client acquires a mortgage, there are mortgage minimisation strategies that can be employed. These strategies make the home loan more affordable. They lower the amount paid in interest or the taxable amount collected by the Australian Taxation Office.
Some clients are happy to pay their monthly repayment amount because they believe they got a good deal at closing. Other clients are curious and adventurous. They’re willing to explore options that allow them to maximize their income and minimize fees and payment amounts.
Credit 100% income to an interest offset account. An offset account is a transactional savings account linked to the mortgage. The entire amount held in the account during a billing period offsets the outstanding home loan amount. The client is only charged interest on the difference.
A mortgage is offset by a $50,000 balance in the account. If the total outstanding mortgage amount is $150,000, the client only pays interest on $100,000. At any interest rate, this offers tidy savings.
Acquire a negatively geared investment property in the name of the highest earner. The higher earner in a household faces a higher tax liability. If the higher earner acquires a property in their name, they have the opportunity to offset their taxable income. Negatively geared properties are those that incur expenses higher than their monthly income.
Purchase a positively geared investment property in the name of the lowest income earner. This is the opposite of the aforementioned strategy. Since the property is delivering a positive income stream, the taxes on the income are offset by the lower-income earner’s income.
Mortgage Minimisation Strategies Conclusion
Brokers might incur clients interested in mortgage minimisation strategies. Mortgage Street is well-versed in these tactics. Plus, we offer competitive loan terms and products. For more information, contact our loan specialists.