Hi all,
I have the following loans setup for my PPOR and 1 IP:
Loan 1: PPOR loan (450K) with Offset (150K) (secured by PPOR)
Loan 2: IP loan for 20% of value of IP (secured by PPOR)
Loan 3: IP loan for 80% of value (secured by IP)
Loan 4: IP loan (115K) with offset (115K) (secured by PPOR), ie no interest paid and is technically "unused".
Questions are:
- should I put all the Rental incomes into Offset for Loan 1, and have interest payments from offsets for loan 1? Or should I do it in offsets for Loan 4? Does it matter from tax deductibility purposes? or it is better to do it in Loan 1 because the rental income will offset the non-deductible debt anyway?
- My banker told me I can pay out and close loan 4, and open new LOC for 200K instead, due to increase in equity of our properties. Should I do this, or I should keep Loan 4, and open Loan 5 for 85K to draw out equity? I never used LOC before so no idea how LOC compares with IP loan with offset. Obviously these loans would be used for purchases of more properties ...
I have the following loans setup for my PPOR and 1 IP:
Loan 1: PPOR loan (450K) with Offset (150K) (secured by PPOR)
Loan 2: IP loan for 20% of value of IP (secured by PPOR)
Loan 3: IP loan for 80% of value (secured by IP)
Loan 4: IP loan (115K) with offset (115K) (secured by PPOR), ie no interest paid and is technically "unused".
Questions are:
- should I put all the Rental incomes into Offset for Loan 1, and have interest payments from offsets for loan 1? Or should I do it in offsets for Loan 4? Does it matter from tax deductibility purposes? or it is better to do it in Loan 1 because the rental income will offset the non-deductible debt anyway?
- My banker told me I can pay out and close loan 4, and open new LOC for 200K instead, due to increase in equity of our properties. Should I do this, or I should keep Loan 4, and open Loan 5 for 85K to draw out equity? I never used LOC before so no idea how LOC compares with IP loan with offset. Obviously these loans would be used for purchases of more properties ...