EP 018: Q&A: When to extract equity, handling rate rises & more…

If you’re anything like me….

The first Tuesday of the month has become rather UNenjoyable.

With constant coverage from mainstream media,
It seems like there’s always another rate rise around the corner.

To tell you the truth…

These recent rate rises have made a dint in the cash flow of my portfolio.

Now, I am fortunate
As my portfolio is still cash flow positive.

However, let me tell you…

It hasn’t made it any easier to watch my profits decline each month.

It’s been incredibly difficult to have no control over this.

So, being the business owner I am.

I started thinking…
Surely there is something I can do about this?


After talking to my mortgage broker Aaron,

I realised that I was in a position to make an active decision.

Fortunately, I was in a position to bring down my rates substantially by changing my loans from Interest Only to Principal & Interest.

Before I continue…
I should probably give you some context first.

It’s important to note that by doing this… I’m losing cash flow.

My repayments now include the interest as well as the principal,
Whereas previously I was paying interest and then saving the excess cash flow in my offset.

Simply put…

My net profit increased,
At the detriment of my cash flow.

In the end…
My interest rates were about 1% lower than they had been previously.

Which represents a dollar value savings of _______
( Oops… I guess you’ll have to listen to the episode! 😂)

To make things even better…

I accomplished that without changing a single bank!
Albeit, not without threatening them with leaving 😇

Now… I understand that this won’t work for everyone.

So, if you’re in a position where you will be needing the cash flow…
This could be a horrible decision for you to make (please talk to your financial advisor or mortgage broker… not me!)

This is simply one of the ways I’m making strategic and active decisions to protect my portfolio during these rate rises.

Anyhow… whether you’re struggling with interest rates,
Or something else…

I am willing to lend an ear.

In this week’s podcast episode, Grant and I are answering all of your recent Q&A submissions!

We’ll be discussing:
– Interest rate rises
– Engaging a buyer’s agent
– As well as equity, accumulation and more!

PS:  Send us any of the questions we’ve missed! I’ll make sure that we get to them in a future episode.


All information we share is NOT financial or investment advice and is purely intended for entertainment and educational purposes only. Always seek professional advice before acting on any financial decision.

Episode Highlights:

00:00 Welcome to Property and Investing
02:44 Why don’t we share the locations of properties we buy? 
05:58 Engaging a buyer’s agent and key learnings I’ve gained
09:56 How are you handling rate raises? 
25:06 Pulling out equity from your portfolio as a deposit during accumulation phase
32:49 When can we justify pulling equity out of a property?

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