Prop Fees Offsets
We’re on target to fully pay off our Mortgage Simplifier of 9K remaining by DEC24. Orange Advantage will be based on our ING Offset Account so no financial impact there.
We’ve fully paid off our mortgage within 2.5 years since our home purchase. By JAN25, we will start drawing down from PPME and PPM. I’ll create a preliminary drawdown schedule by DEC24 before our family cruise. PPME first, then PPM.
We would also need to finalize KD/KMA allocation out of ING by JUN25, and start reallocating KFI-BInvT out of ING. I’ll have to create an allocation schedule for KD/KMA by DEC24 to be effective JAN25.
As for Prop Fees Offsets, considering that we’ll be mortgage free and no rent to pay, our main primary residence costs will be the ongoing property fees. These include STRATA, Council, and Water. STRATA: 1.65K, Council: .42K, Water: .18K, Total: 2.25K/Quarterly = 9K/Annually. Our goal is to have our DFC cover these costs. Franking Credits are about half of total dividends, so about 6.5K Dividends, 2.5K Franking Credits.
Our Mortgage Repayments are about 42K, which we’ll utilize as our down payment for our investment property. Prefer not to keep all of our funds mixed with EFI, DFC, KD/KMA and KFI-BInvT, and now down payment, so we’ll most likely use an existing savings account, or open another bank account, until we’re ready to purchase another property.
We average about 6% in DY%. FC is about 2.5%. Total DFC is 8.5%. 6.5K Dividends / 6% DY% = 108K. Our Mortgage Interest Rate (MI) to-date, remains at 6.79%. I don’t plan to keep EFI fully invested due to the MI% > DY%, so any realized gains will be offset with prop fees. To keep the calculations simple, we’ll most likely need to set up another bank account to reflect the realized gains and dividends received. Franking Credits are received after tax filing, so that would be a direct offset.
To-date, banks are still trading at premium, so most likely we won’t be trading them this year. ANZ seems to be the trading closer to our TPP, so we’ll monitor ANZ. Materials RIO and BHP are still volatile and slowly trending upwards after it’s downward spike so trading prices are close to our TPPs. Most likely we’ll continue trading RIO and BHP. MIN is still too volatile for us to trade at the moment.
WAM is now trading within our TPP range so we’ll most likely play WAM this year. DXS is within our trading range, so we’ll play DXS as well.
