Loan Consolidation



From: Mun Seet

Hi Everyone!

As a newbie I have read message on this forum for a few weeks with great interest. This is my first go posting a request and I do hope that someone would be able to help me.

I have one IP fully paid off and I have about $90K owing to BankWest on my residential home. Sometime ago, I borrowed about $40k for buying two cars and $20K for buying some shares. Two months ago I bought an IP for $140K which I borrowed from BankWest.

My mortgage broker consolidated the loan for my residential home, the loan for my cars and shares into one INTEREST ONLY loan with BankWest.

I wonder if this is a good thing or a bad thing in terms of taxation purposes and for record keeping of my IPs.

I enquired at BankWest today and I was told that I could split them up into individual mortgages at a cost of about $400.00.

My question is: Should I or shouldn't I split them up? What are the benefits of splitting them up?

Any advice would be greatly appreciated.
Last edited by a moderator:
Reply: 1
From: Rolf Latham

Hi Mun

If you intend to pay interest only and the loans amounts will never change then you can clearly demonstrate what is and what is not deductible.

If however you start to reduce the debt, as you might want to where depreciating assets such as cars are involved, then I would split the facility into private and investment parts.

You could use one of Bankwests offset accounts and make use of your income and kill your personal debt ASAP.


Last edited by a moderator: