$280k income, $80k in offset—should we invest or keep paying down mortgage?

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EltonSierra

New Member
Hey everyone,

Posting under a fake name since I’ve got some mates in this group.

My partner and I together make about $280k a year (she’s on around $160k, and I’m on $120k). We've got our own place with a mortgage of roughly $550k, no car payments, n kids, and we’ve got about $80k sitting in our offset account right now.

At the moment, we’re putting away around $1,000 a fortnight, and any extra cash is just going straight into the offset, which basically gives us a 5.5% return by cutting down on interest.

I’m kind of wondering if we should be doing something more with our money to get sorted for the long haul. Should we just keep piling it into the offset, or is it worth checking out other stuff like investing, super, or other options?

I’d really like to know what other people in a similar boat are doing.

Cheers!
 
I honestly believe a 5.5% risk free return feels like a very solid and comforting choice. Sure, you could aim higher with individual stocks or ETFs, but that comes with greater uncertainty, and then you have to face taxes on dividends and any profits you make.
 
If you plan to stay in your home for a long time, paying down your loan may be more helpful than using an offset account. You can still access your money through redraw, but it’s often easier to spend from an offset than to redraw.

If you redraw to invest, your accountant can confirm the interest on that part of the loan may be tax deductible. Learning about debt recycling could help you understand this better.

For me, I would consider investing in property. With $80k, you could buy a $550k investment property. Just 5% growth would give around $27.5k a year. That’s much more than the $4.4k you’re saving now in interest.

I usually suggest putting about half of your income toward your mortgage an d savings. Right now you’re a little under that, even with your salary sacrifice.

I’m happy to go over your numbers and talk about your long term goals if you’d like.
 
To help your money work more efficiently, consider learning about the stock market and basic economics. It’s not too difficult.

As mentioned, it’s challenging to outperform a risk free 5.5% return.
 
You'll want to invest in good growth properties.

It's a smart move to debt recycle first.

That way, you can reduce your non tax deductible debt and increase the tax deductible debt.
 
I'd take a look at your lifestyle. With $280K combined income, saving just $500 a week doesn't seem like much. But you're right, super is a solid way to cut down on tax.
 
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