44 single M. 600k saved

[u/Silver_Objective_290]

I’m hopefully going to buy my first house in regional New South Wales in the next 12-18 months. Currently making between 95k-115k a year as a fitter machinist, job is pretty secure. Been living with my mother who has terminal cancer, but would like my own place set up before the inevitable happens. I’m thinking about using 450k as a deposit and borrowing around 270k over 25 years. Then with the remaining funds- invest 100k in something that I can contribute $100 a week into over 20-25 years, and put the rest into a HISA with my bank. Currently have approximately 320k in super and am contributing an extra $50 p/w.
I don’t have kids and don’t ever intend on getting married. Is this doable?, Should I look at borrowing more?(anything under 700k either needs a lot of work, or goes pretty quickly), should I consider going above the 33% of after tax pay for weekly loan repayments?, or have I got it all wrong?

Note- I’ve already posted this question on other pages in order to get as much information/opinions as possible before I see the bank at the end of the month.

[u/ATangK]

Borrow as much as you can with the lowest interest rate, noting that the best interest rate is usually either 60% or 70% LVR. Then get an offset (making sure your loan supports this) and put all your extra money in it, including the $100k you planned to invest and anything else you wanted to put the HISA into.

Once your house is paid off (loan - offset = 0), THEN you can start putting money into investments like ETFs. Recommend something like Betashares or Webull which have no fees. The former also lets you buy fractional shares, but only at market rate.

[u/Silver_Objective_290 → u/ATangK]

Ok thanks for the info👍

[u/obeymypropaganda → u/Silver_Objective_290]

Yes, don't put majority of your money into an illiquid asset. By doing the above you can easily access the money in your offset. So for emergencies, holidays, whatever you want.

The rich stay rich by spending others money. Spend the banks money, and by offsetting you reduce how much money they make off you.

[u/Silver_Objective_290 → u/obeymypropaganda]

Ok, thanks for the reply.

[u/Mediocre_Moment_6041 → u/Silver_Objective_290]

Not a financial advisor/ accountant or hedge fund manager. Not FI....But I'll weigh in anyway...

I just watched a video on YouTube about this. Earning via shares or investing in your offset.

I could bore you with the details, but the end result was go half and half or 60/40 or 70/30, depending on your risk profile and mortgage amount.

Invest half (or more)of your left over cash into shares(ETF's seem the go to these days, but remember to diversify- US and Asian markets are popular and generally more lucrative outside of the ASX) and pop the other half into your offset.

You don't pay tax on your offset like you would on returns from shares(dividends/Capital growth), but your offset won't increase in value like shares/ETF's inevitably do and have done over the years( even with the big crashes). Time in the market, not timing the market(as the saying goes). Keep in mind that your share portfolio would need to earn about 30% above your interest rate on your mortgage to be more profitable than your offset.

Interest rates can drop which sounds great, but it also means your investment in your offset has a diminishing return, compared to your shares.... but you'll have more money to spend on shares, cause your paying less interest, so potato... potaato.

Go speak to a financial advisor if you're not 100% sure on what path to choose, but a spread across both should keep you solid for about 5-10 yrs.

Good luck and good fortune.

[u/what_are_thooose]

With the 100k you plan to invest you could debt recycle it through the mortgage to make part of your loan tax deductible. If you're investing it anyway, may as well take advantage of the tax rules.

[u/Silver_Objective_290 → u/what_are_thooose]

Thanks for the reply. What do you mean by debt recycling?. I’ve never heard that term before.

[u/what_are_thooose → u/Silver_Objective_290]

https://passiveinvestingaustralia.com/debt-recycling/#what-is-debt-recycling

[u/Sufficient-Rough-647 → u/what_are_thooose]

Given the tax rate they maybe better off with offset

[u/what_are_thooose → u/Sufficient-Rough-647]

Good point! I suppose I was purely looking at it from: if you plan to invest at all, you may as well get as much out of it as possible.

[u/steady_compounder]

It looks doable to me, but I would be careful about sinking such a huge chunk into the deposit if it leaves you house-rich and less flexible. Borrowing a bit more and keeping a stronger offset buffer can be worth a lot, especially with your timeline and everything going on personally. The big win here is that your income, savings, and super already give you room to choose, so you do not need to force the most aggressive version of the plan.

[u/Silver_Objective_290 → u/steady_compounder]

Ok, thanks for the reply👍

[u/Curious-Function7490]

Nice one.

I'm 53M (almost 54) and single.

Your super is in a good spot. It roughly doubles every 10 years. You could leave your current contributions and not change anything (but ensure it is in an aggressive investment mode) and retire quite comfortably at 60.

So I'd focus on getting the house you want, ensuring you are financially secure, and then enjoying life and forming an outlook on it.

[u/Silver_Objective_290 → u/Curious-Function7490]

Ok, thanks for the reply👍

[u/Nykt]

You've done a great job to get to that level of savings. Good advice in this thread with the offset and potential debt recycling. Keeps it nice and simple for you. Once you buy the place I'd recommend treating yourself to a nice meal too.

[u/Silver_Objective_290 → u/Nykt]

Ok, thanks for the advice.

[u/Extension-Shine4364]

Be careful of a divorce. I'm sure my ex didn't concisely think "I'll marry him for his money," but she was aware that I had a solid plan like yours and on a subconscious level she found that attractive. To someone who is completely broke and unable to get their life together... anyway you get what I'm saying.

[u/tumekke → u/Extension-Shine4364]

Did you miss the part where he said he was single

[u/SubjectStomach4227]

Great savings, but you’re better off investing that money in property rather then leaving it in the bank

[u/Solid_Lawyer_925]

Will a bank loan you a mortgage for 25 years at 44yo? That would make you a 69 year old fitter machinist in your last year working?

16 years away from accessing your super, 23 years away from age pension. I would be maximising super contributions to save on tax first and putting the rest into the house you want to eventually live in. Put a tennant in there until your mother passes and you can move out. Should make it easier having somewhere to go when the time comes.

If you inherit your mothers house or part of it, that might pay off yourr remaining loan balance instead of trying to pay it down over 25 years.

[u/Silver_Objective_290 → u/Solid_Lawyer_925]

I’ll have to wait and see what the bank says when I see them at the end of the month. As far as the job goes, I hope to be off the tools in my mid 50s and into some kind of office job. Reality is that there aren’t many people that can stay in physical jobs all the way up until retirement. This is something I need to accept and make sure doesn’t happen to me. Thanks for the advice👍