I could pay back $13000.00 mortgage or pay back $50.000 and

Sorry helenbronwen but your question has my head spinning. :?

Could you start over and explain your situation in a little more detail. Is this just one property we're talking about here? How many mortgages and what amounts to you owe? And How much money do you have saved up that your looking to use?

It might just be me but I don't exactly know how to answer your question without better understanding your situation.

thanks

it s just the one property, an investment property. my house is mortgage free and i have other assets too. just want to handle the refinacing of this one optimally. the apartment was purchased for $225 on the beachfront in a good location. has been continuously rented for the past 5 years on an interest only mortgage. now its time to refinance. i paid a $45 deposit, repaid $ 50 3 years ago and still have $130 owing to the bank. i want to keep on having a tenant finance it but need to see what is the best way to handle it. all my conservative accountant says is repay it right now. i can just see i am using up cash that is providing a good return right and that if i was to up the rate of repayment i might be able to do " negative gearing" and get a tax break as well.

Hi Helen,

Perhaps you want to know whether it will be good to pay a part of your loan and remortgage the remaining balance or it will be better to continue paying the loan at the current rate. well, I suppose it depends on how much and how long you can afford to pay.

If you think using the rent payments, you can afford a mortgage at the floating rate, you can go for the first option, that is, paying off a part of the loan and then remortgaging the rest of it. Otherwise, you can simply continue paying at the fixed rate of 9.4%.

I didn't understand what you meant by "negative gearing". Can you please explain it in detail?

Thanks