Turning home loan into investment loan

I currently have an IO loan for my PPOR and excess cash goes into the offset account. Once my savings in the offset account exceed the loan value, can I pay off the loan (without closing the loan account) and then redraw say a week later for investment purposes? Would the interest be deductible now that purpose of the loan has changed?
 
Hiya Don

In general, yes if the loan is fully paid down, and then redrawn for tax ded purposes this should be ok

Couple of things

1. Im not an accountant
2. The loan product may not support redraw while under IO


ta
rolf
 
I am not an accountant either, but have done what you want to do.

My understanding is that it’s the purpose of the funds that make it either tax deductable or not.

So if the funds are being used for income producing purposes then to my knowledge they would be tax deductable.

Check this out with an accountant however.
 
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