Thank you all for your comments and suggestions, it is great to get some feedback rather then just stressing about it.

After everyones comments I agree, it is kind of stupid to pay out the mortgage with a personal loan, but the only reason was maybe so the bank would lend me more as I would of almost paid out the mortgage and the PLoan repayments could of been payed by renter.

darkon, if you buy an IP first, and never live in it, you will still be eligible for the FHOG when you do buy a place to live in. On your income, it doesn’t sound like you really need to rely on the FHOG anyway.

I didn’t know that, that works out a lot better for me as I could now use the FHOG on a place I would like to move into. Do they have a limit on how many IPs you are allowed to have that you dont move into?

Well thanks again guys.