Advice on loan structure
HI,
My wife and I have recently refinanced our PPOR in order to 1. complete home renovations and 2. purchase our first investment property.
We have been set up with the following loan structure:
520k loan, split into:
- 300k fixed Interest only loan
- 220k variable interest only loan
The 220k loan is split further into
- 70k (for 'personal' use - ie consolidating cr card debt, home renos)
- 150k for investment property deposit/purchase costs.
We also have an offset account, which the bank has currently linked to the 150k split.
At present, the balance of our loan after paying off the previous mortgage is sitting in the offset account.
I am wondering if we should keep the money sitting in the offset account, with it linked to the 150k split until we purchase the IP, then change the linked account to the 70k split (so its offsetting the interest on the 'non-deductible' debt), or if we would be better paying the 150k into the 150k loan then redrawing it when needed? I assume if we don't use the full 150k for investment, but some for personal use, the accountant will just need clear evidence for how we have spent the money in that loan?
Any advice is appreciated.
HI,
My wife and I have recently refinanced our PPOR in order to 1. complete home renovations and 2. purchase our first investment property.
We have been set up with the following loan structure:
520k loan, split into:
- 300k fixed Interest only loan
- 220k variable interest only loan
The 220k loan is split further into
- 70k (for 'personal' use - ie consolidating cr card debt, home renos)
- 150k for investment property deposit/purchase costs.
We also have an offset account, which the bank has currently linked to the 150k split.
At present, the balance of our loan after paying off the previous mortgage is sitting in the offset account.
I am wondering if we should keep the money sitting in the offset account, with it linked to the 150k split until we purchase the IP, then change the linked account to the 70k split (so its offsetting the interest on the 'non-deductible' debt), or if we would be better paying the 150k into the 150k loan then redrawing it when needed? I assume if we don't use the full 150k for investment, but some for personal use, the accountant will just need clear evidence for how we have spent the money in that loan?
Any advice is appreciated.
Last edited: