Loan interest deductability question

[Angel]

I am currently trying to get the interest rate reduced on our mortgages and neither NAB nor Suncorp are playing nicely.

Suncorp refuses to reduce the interest rate on the Line of Credit, but might offer us a new loan from their suite of new business deals. Same house but with a whole new loan. Does this mean that the interest charged on the new loan, effectively to refinance the first loan, would not be deductable? I have emailed our accountant but I would appreciate your opinions in case I don't hear from him tomorrow.

While all you geniuses are here, can you think of any problems going to a Standard Variable with offset or a Back to Basics with no offset? We currently use an offset at Nab but by changing the nab SV to fixed interest at the lower rate, they will remove the offset facility.


NAB is playing different delay tactics but it isn't as major an issue.

Thanks

 

[Peter_Tersteeg]

I've found both NAB and Suncorp quite willing to negotiate recently (along with quite a few other lenders). Things which could affect their response would be LVR and loan structure.

If you're switching one loan to another loan type, this shouldn't affect the deductability of the loan.

 

[Jamie M]

Hiya Angel

If the loan is currently deductible then a product swap shouldn't change that.

Cheers

Jamie

 

[Terry_w]

I am currently trying to get the interest rate reduced on our mortgages and neither NAB nor Suncorp are playing nicely.

Suncorp refuses to reduce the interest rate on the Line of Credit, but might offer us a new loan from their suite of new business deals. Same house but with a whole new loan. Does this mean that the interest charged on the new loan, effectively to refinance the first loan, would not be deductable? I have emailed our accountant but I would appreciate your opinions in case I don't hear from him tomorrow.

While all you geniuses are here, can you think of any problems going to a Standard Variable with offset or a Back to Basics with no offset? We currently use an offset at Nab but by changing the nab SV to fixed interest at the lower rate, they will remove the offset facility.


NAB is playing different delay tactics but it isn't as major an issue.

Thanks

Refinancing doesn't change deductibility of interest. If the original loan interest was deductible then the new loan's itnerest would generally be deductible.

Different usage patterns could destroy deductibility however - eg. paying down a loan and redrawing for private use.

 

[Colin Rice]

If you are dealing directly with a bank then get a broker on side as they tend to perk up as they know we will refinance elsewhere in a heartbeat.

It costs them a lot more to find a new customer than keep an existing one and makes good business sense to shave some basis points of the rate to retain your loans.