IP 1
Value: 550k
Oweing: 350k
Equity: 200k
rent: 535pw
IP 2
Value: 450k
Oweing: 350k
Equity: 100k
rent: 400pw
PPOR
Value: 580k
Oweing: 500k
Hi, I heard from somewhere I could actually use a LOC to push down the mortgage on a PPOR. I have heard of LOC but didn't actually grasp the concept. Vaguely, I can supposedly take the rent from IP 1 and IP 2 (after property manager's, insurance, water and rates) and dump it in PPOR repayments + the usual fortnight repayments. Then the interest payments for IP 1 and IP 2 can be paid via equity from them, at a higher interest rate.
If someone is to be so kind to me and tell me if I'm right or wrong in the above. Are there tax or legal implications or complications? Since using the rents to pay for PPOR, I suppose the interest i pay for the LOC is not tax deductible as well (right?). I would like to reduce the PPOR loan.
thanks in advance.
Value: 550k
Oweing: 350k
Equity: 200k
rent: 535pw
IP 2
Value: 450k
Oweing: 350k
Equity: 100k
rent: 400pw
PPOR
Value: 580k
Oweing: 500k
Hi, I heard from somewhere I could actually use a LOC to push down the mortgage on a PPOR. I have heard of LOC but didn't actually grasp the concept. Vaguely, I can supposedly take the rent from IP 1 and IP 2 (after property manager's, insurance, water and rates) and dump it in PPOR repayments + the usual fortnight repayments. Then the interest payments for IP 1 and IP 2 can be paid via equity from them, at a higher interest rate.
If someone is to be so kind to me and tell me if I'm right or wrong in the above. Are there tax or legal implications or complications? Since using the rents to pay for PPOR, I suppose the interest i pay for the LOC is not tax deductible as well (right?). I would like to reduce the PPOR loan.
thanks in advance.
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