The $250k Dilemma: "Pay Down the Mortgage or Power Up Your Portfolio?"

Send us Fan MailIn this listener-driven episode of TFS WealthCast, Pramu and financial planner Sonali unpack a scenario many homeowners face: a $750k mortgage on an $850k home (an LVR of about 85%) and a sudden $250k windfall. They start by explaining how loan‑to‑value ratio (LVR) affects your borrowing costs and why dropping below 80 % can remove Lenders Mortgage Insurance and unlock better rates. They also discuss exceptions such as LMI waivers for certain professionals like doctors, accountants and lawyers, who can borrow up to 90% or more without paying LMI. The discussion explores three strategies for the $250k:• Reduce the mortgage – paying down debt increases equity and stability. • Invest elsewhere – diverting funds into Shares, ETFs, Managed Funds or Property Investments need to beat a typical 6 % mortgage rate to be viable. • Debt recycling – using the $250k to pay down the mortgage, then re-borrowing that amount as a deductible investment loan to buy income‑producing assets.Sonali emphasises the difference between “good” (deductible) debt and “bad” (non‑deductible) debt, the importance of risk tolerance and the potential to leverage equity for property or share investments. They also touch on advanced options like investing through trusts, buying businesses or using managed funds and why personal financial advice is essential. Whether you’re aiming to retire comfortably, accelerate your home loan repayment or build a robust portfolio, this episode offers some good insights, for the listeners to make informed decisions... Any information discussed or provided in this podcast is general advice and has been provided without taking account of your objectives, financial situation or needs, you should consider the appropriateness of this advice before acting on it. If this general advice relates to acquiring a financial product, you should obtain a Product Disclosure Statement before deciding to acquire the product.Websitehttps://www.tomorrowfs.com.au/Facebookhttps://www.facebook.com/tomorrowfs.com.au?mibextid=wwXIfr&rdid=2XjnQHpmHV1wnR4r&share_url=https%3A%2F%2Fwww.facebook.com%2Fshare%2F1CeyxmzE79%2F%3Fmibextid%3DwwXIfr#Instagramhttps://www.instagram.com/tomorrowfs.com.au/?igsh=aWUwaDZxcWM5amF6#YouTubehttps://www.youtube.com/@tomorrowfsTikTokhttps://www.tiktok.com/@tomorrowfs?_t=ZS-8z0BOYqsW7J&_r=1