Equity release for renovation (PPOR)

Hey Brokers,
I just had a quick question regarding an equity release for a renovation on my PPOR.
I have 80k available equity to release but what is the recommended way to do this?

From my reading on these forums it can be done via a LOC but this comes with some negatives. The other way is just a standard variable loan.

The part I am a bit hazy on is that with a LOC you are charged interest on the amount you use. So if you do not use it you pay no interest, obviously this works well for a reno because payments will be staged as you work through the renovation.

If I get a separate loan though how does this work in regards to accessing these funds and interest payments? Can you just link it to an offset and the 80k is parked in the offset and interest charged when you start using it?
 
If existing loan is for PPOR and funds being used to renovate PPOR then just top up the loan, either funds into redraw or offset. There shouldn't be any tax implications as it's a PPOR not IP. I don't think there is a need for a LOC with some banks you will pay a premium for a LOC, can use offset or redraw in similar way to not get charged interest on undrawn amounts.
 
I'd set it up exactly as Brady mentioned.

For your info - you can set up a standard variable IO loan as opposed to a LOC and not pay interest until you use the funds too.

The way you do this is by either parking the equity release funds back into the loans redraw or a linked offset.

Cheers

Jamie
 
If existing loan is for PPOR and funds being used to renovate PPOR then just top up the loan, either funds into redraw or offset. There shouldn't be any tax implications as it's a PPOR not IP. I don't think there is a need for a LOC with some banks you will pay a premium for a LOC, can use offset or redraw in similar way to not get charged interest on undrawn amounts.

Thanks Brady, so you also would be able to create a separate loan though and have it linked with an offset and the equity release paid into that?

Reason I ask is my loan is split with my brother and it makes more sense to have a separate account which we can just pay off each month as opposed to topping up an equal share in our split loans. This would just become messy when trying to pay equally for the renovation.
 
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