Hybrids are a form of interest rate security that share some features of bonds and some features of equities. They offer the opportunity for the investor to receive regular dividend (or coupon) payments (that may be higher than what you might receive from bonds) and the opportunity to get a full return of your original capital after a specified time period (just like bonds) – assuming the is... »
There are countless books and articles written about how you can pay off your home loan quickly. The key strategies to do so can basically be summarised into the following points: 1. Maximise you and your partner’s job and/or business income. 2. Buy a home with a loan amount that is not too high relative to your salary – if you over-commit in the first place this will make the task of ... »
A cash bond is a type of investment used by some investors when they approach their debt serviceability limit with banks, and is a way of increasing serviceability by “ticking the boxes” of a lenders debt serviceability criteria so that you can borrow more money to invest. In order to do this you need to have at least some equity available to use, either through borrowings from a line ... »
As you may have noticed, we haven’t written a lot about bonds! It’s not that we don’t like bonds, we do – bonds are good for diversification and as a counter-cyclical asset to shares (ie. bonds tend to do well when shares don’t), and to reduce risk and improve risk-adjusted returns. That being said, we feel that most people should be able to adequately meet most of their lo... »
When getting a home loan for a principal place of residence (PPOR), you will usually have the option of putting repayments of the principal loan amount (and any extra cash savings on top of this) either into a redraw account attached to the home loan or into a 100% home loan offset account. In both cases, the cash that goes into either the redraw account or offset account reduces the effective int... »
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