Simple loan Q about re-mortgaging and tax

[Samwise]

I'm looking to switch my PPoR mortgage to a more competitive product, perhaps with a new lender.

Current loan is $450K on $700K property.

With the new lender, if i obtain an 80% LVR mortgage ($560K) and then rent my house out, can i claim the interest against the $560K amount as a tax deduction or will it be the original loan amount when the property was purchased ($450K?).

Cheers, Sam

 

[Qlds007]

Regretfully not.

Interest deductibility will be limited to the $450K amount.

 

[Rolf Latham]

What Richo said,

one small qualification is that if u use the new funds to purchase another IP, then that new money will be deductible against the new rent.

Usually wise to split the new facility inot old and new money anyways


ta
rolf

 

[Samwise]

Thought so... thanks for clarifying

Sam