Redrawing increases the loan. Its a non-deductible borrowing. You have a blended loan like a smoothie. Pick out the strawberry and eat it...You cant. Think of a credit card. Start with $1k of deductible then you use it on 20 other non-ded bits. How much is deductible after 1 month may be easy...
If the original $260k balance was the portion used to buy the house yes. However if you long ago borrowed $260K and say $20K for a car and its now dropped to a $260k balance then only $241K would be deductible
(ie 260/280 x $260K)
Once you blend you must apportion and its awfully difficult...
