not too sure if or how ?

Hi all..

I’ve had an IP for 15yrs, which was negatively geared. It still has a small mortgage.
Now all the net profits have been paying down the loan. The first 5 year was interest only. The original term of loan ends in 5 yrs time. I'm paying very little in interest i.e. 25% interest ,the rest 75% to principal. Can I refinance the balance to a new loan

Q. will this cause any probs with ATO.

Thinking of using cash flow to help finance a new IP instead of paying off original loan.
 
no. The ato ask what is the purpose of the loan only, not the terms of the loan, whether it is P&I or secured by another property, or a loan from your uncle makes no diference whatsover.
 
Thanks all,

Tobe really answered my question. I can plan a new strategy.

Marg i don't think I could switch to IO as the loan has only 5 yrs left.
 
Thanks all,

Tobe really answered my question. I can plan a new strategy.

Marg i don't think I could switch to IO as the loan has only 5 yrs left.

No reason you still couldn't switch to IO. Even "better", if you're looking at cashflow, is to refinance to a 25/30 year loan with the first 5 years at IO.

Use one of those bank website calculators to figure out your repayments if you did THAT! :cool:
 
You can increase the loan if you want, but the deductibility of the interest on the increased portion will depend on what the funds are used for.

If you do increase it, its a good idea to use a separate split. This makes it easier to apportion the interest.
 
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