Hi all,
Planning to purchase a unit with 400k loan for PPOR.
We are looking at structuring our loan below:
- 200k on variable(interest only with offset)
- 200k on fixed loan for 3 years. (principal + interest)
In the next 5 years time, we plan to convert our PPOR to IP.
Question;
1) For the fixed loan, upon maturity after 3 years, the loan will be converted into the variable loan.
Will this contaminate the loan for tax purposes?
2) After converting to IP, will the interest be tax deductible on the full loan amount (400k)?
3) Will it be better off to just have a 400k variable (interest only with offset) loan?
Thanks
Planning to purchase a unit with 400k loan for PPOR.
We are looking at structuring our loan below:
- 200k on variable(interest only with offset)
- 200k on fixed loan for 3 years. (principal + interest)
In the next 5 years time, we plan to convert our PPOR to IP.
Question;
1) For the fixed loan, upon maturity after 3 years, the loan will be converted into the variable loan.
Will this contaminate the loan for tax purposes?
2) After converting to IP, will the interest be tax deductible on the full loan amount (400k)?
3) Will it be better off to just have a 400k variable (interest only with offset) loan?
Thanks