Hi Folks, I have a question-
The balance on my PPOR loan is for $255,000 and I have $120,000 in the linked offset account. Towards the aim of purchasing my 2nd IP, would it be a better option to transfer some amount (Eg 80000) from my offset account to the PPOR loan account which would sit as redraw. This would reduce the PPOR loan amount to $175,000. I could then use the redraw as equity from my PPOR to partially fund my deposit on the 2nd IP as an investment loan. So effectively my PPOR loan would be $175,000 (non tax deductible) and 2nd IP loan would be $80,000 (tax deductible)and ofcourse another loan from the bank to cover the balance.
Essentially my question is would this approach be better than funding the entire deposit from my offset. It looks like I can reduce the non tax deductible portion from my PPOR in this way. Apologies if I've got it completely wrong or if its a dumb question.
The balance on my PPOR loan is for $255,000 and I have $120,000 in the linked offset account. Towards the aim of purchasing my 2nd IP, would it be a better option to transfer some amount (Eg 80000) from my offset account to the PPOR loan account which would sit as redraw. This would reduce the PPOR loan amount to $175,000. I could then use the redraw as equity from my PPOR to partially fund my deposit on the 2nd IP as an investment loan. So effectively my PPOR loan would be $175,000 (non tax deductible) and 2nd IP loan would be $80,000 (tax deductible)and ofcourse another loan from the bank to cover the balance.
Essentially my question is would this approach be better than funding the entire deposit from my offset. It looks like I can reduce the non tax deductible portion from my PPOR in this way. Apologies if I've got it completely wrong or if its a dumb question.