Playing the mortgage game
Q. I'm a 28-year-old single woman and I bought a rental property in January 2004 for which I have a $149,500 mortgage.
Tuesday, August 23rd 2005, 8:31AM
by The Landlord
The mortgage is interest-only, fixed at 7.3 per cent until January 2006. The rent pays for all the annual outgoings.My plan is to keep renewing a fixed-rate, interest-only mortgage and, at the end of each term, pay a lump sum off the borrowed amount before re-fixing.
This will give me flexibility on how much I can afford to put towards paying it off each term and won't tie me to high principal and interest repayments every fortnight. I can't afford to live in the property on my own which is why I'm renting it out.
I'm leaving my job in September to go travelling and will get a superannuation payout of about $18,000 which I have been contributing to. I have two questions:
* Should I put all the superannuation money on the mortgage when I re-fix it next year or should I put some into another super fund?
* Do you think my plan of paying lump sums instead of principal and interest repayments is a good idea?
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