IMB Equity Line Advantage query

[Gargamel]

I currently have a variable rate loan for an IP with IMB. I've calculated that I have adequate equity to draw on to use as a deposit for another IP.

The equity line advantage loan is described on their web page as "The IMB Equity Line Advantage combines your home loan and everyday accounts in one so that your entire income works towards paying off your home loan. Your salary is paid directly into your IMB Equity Line Advantage reducing interest charged. You then simply draw out what you need to cover your living expenses."

I read this as a new loan effectively - no seperate accounts for existing mortgage and seperate account for LOE. IS this correct? Is this something I should avoid doing?

 

[Gargamel]

Please help out a noob

 

[tobe]

Welcome.
From what you describe, it seem this product is a line of credit.
Its not an offset account, its just a loan account that allows deposits and withdrawals up to a certain limit.

If this isnt the loan you have already, and you changed over to this product, it would be a new loan, and depending on how IMB do things, and whether you ask for more money, you will require a new application.
Im not sure about the reference to LOE.

Almost always its better to set up an interest only term loan with offset for IP purchases. Line of Credits are rarely any more useful and have the disadvantage of changing the purpose of the loan for tax if you take out or put in earned income, or use the loan for personal purposes.