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Using access bond to buy second property

Dec 02 2014 15:37

A Fin24 user wants to know if it is a good idea to use the access bond on his primary property to buy a second one. He writes:

I am planning to buy a rent-to-let property. On my current bond (on my primary residence), I have enough money through the access bond facility to buy the second property cash.

Would you advise me to get a second bond or to use the funds in the access facility to buy the property cash?

Justin Easthorpe, ooba's regional sales manager, responds:

It is always advisable to bond a property that you intend to let given the tax benefits relating to the interest portion of the bond and writing off maintenance of the property.

Should you not intend benefiting from tax, it may be beneficial to take the funds out of the existing bond, depending on what interest rate is being charged on the bond.

You may have funds available in the existing bond at a lower rate than what can be expected from a new bond application.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers. Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.

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ooba  |  property  |  money  |  money clinic
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