Hi all,
I can't seem to make a decision on whether to sell my unit in order to buy a house or take a mortgage for the full amount of house price and keep the unit as an investment and rent it out to help with repayments.
Here are some details:
I have a mortgage on my unit which has been fully repaid, although I keep the loan open and can still redraw money if I need to. However, I now need a bigger place to accommodate my growing family.
I have enough equity to borrow 100% and buy a house.
From monthly cash flow point of view I'd be better off to sell the unit and, therefore, borrow much less money to buy a house and pay less interests overall than to pay interest on the 100% loan of the purchase price, rent my loan free unit, pay taxes on rental income and not being able to tax deduct any interests on the new house loan.
From long term investment point of view I should keep the unit as an investment as its value has been growing at the higher rate than the bank mortgage interest rates. Considering all costs associated with buying an investment property such as stamp duty I am trying to find a way and justify monthly out of pocket cost to keep the unit as an investment. However, I might be stretching my monthly budget and be on a strict cash flow regime.
Has anyone been in this situation? Please share your thoughts. What did you do? Or what would you do?
I can't seem to make a decision on whether to sell my unit in order to buy a house or take a mortgage for the full amount of house price and keep the unit as an investment and rent it out to help with repayments.
Here are some details:
I have a mortgage on my unit which has been fully repaid, although I keep the loan open and can still redraw money if I need to. However, I now need a bigger place to accommodate my growing family.
I have enough equity to borrow 100% and buy a house.
From monthly cash flow point of view I'd be better off to sell the unit and, therefore, borrow much less money to buy a house and pay less interests overall than to pay interest on the 100% loan of the purchase price, rent my loan free unit, pay taxes on rental income and not being able to tax deduct any interests on the new house loan.
From long term investment point of view I should keep the unit as an investment as its value has been growing at the higher rate than the bank mortgage interest rates. Considering all costs associated with buying an investment property such as stamp duty I am trying to find a way and justify monthly out of pocket cost to keep the unit as an investment. However, I might be stretching my monthly budget and be on a strict cash flow regime.
Has anyone been in this situation? Please share your thoughts. What did you do? Or what would you do?