Background Married couple Harry and Helen are property investors. They own one i

Question

Background

Married couple Harry and Helen are property investors. They own one investment property – a negatively-geared three-bedroom home which they bought as a buy and hold for $300,000 five years ago. The property is now worth $475,000 and rents for $600 per week. At the time of purchasing, they borrowed 80% of the purchase price from the XYZ bank on a 30 year principal and interest loan with monthly repayments in arrears. They have a variable interest rate which is currently 7.1%.

Q.1 How much would Harry and Helen now owe on their initial investment property loan?

Explanation / Answer

Answer:1 Property loan=$475000*80%=$380000

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