Nick,

It sounds really unfair but the fact is the ATO treat the payments in as paying down the loan and the redraw as a new borrowing event.

This is where an offset makes the difference.

Regards,

Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

What year was it built and the building cost?

Is there a depreciation schedule?

Cheers,

Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Steve,

Contact your lender and request it. They will examine your serviceability as when yhe IO term expires the repayments will be higher again as a result of the lessened term.

There will be costs if you decide to change lenders. Only consider this if the savings are warranted or you have another good reason.

Cheers,

Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

To use the money for anything else than investment streams of income would deny the deductibility.

Your idea will speed up your savings rate.
It wil lalso increase your serviceability for the next loan.

Cheers,

Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Dreamer,

You have a tax problem.

What ever you redraw is seen as a new loan and the deuctibility will be determined by it’s purpose.

If it goes towards your new PPOR then it isn’t deductible.

This is where saving in an offset would have been better as it preserves the original loan.

The only way around this is to transfer ownership of the property and reborrow 100% to buy it. ie sell it to a spouse or a trust. Stamd duty will be incurred so it wont be cheap.

Sorry to be the one to give you the bad news.

Regards

Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Why do you choose DHA instead of the open rental market? DHA is expensive.

Cheers,

Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Les,

In your case it is very much a personal choice. Do you want to pay down the loan or use that portion of the cashflow for something else?

Russ,

Once again it is up to you!

Cheers,

Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

Diane,

Lets see how we go with some answers.

have read a lot about not using your own money and leaves me wondering about where all the reborrowing leaves you…?? Do you actually ever own the real estate, or just a percentage of lots of real estate??

Well you will own everything less the mortgage. As values rise and with inflation the mortgage will be less and less in real terms. Your investment should increase.

Anyway – have a question,well a few actually… for a patient person.
We have no PPOR. We have purchased our first IP with 20% deposit and we spent another $5,000 of our own money to make it comfortable and in good repair.
We have a second-hand carport and council approval to erect it. However, our circumstances have changed and there is work involved in making it the right size and then to erect it. Plus as we have moved the carport is now in one direction and the IP in another !! So we are looking at buying a new one and paying someone to erect it. We have enough funds to do this, however can we borrow this money?? And do we need a licenced valuation to do it, and what would this approx cost be??

You can borrow this money and it will be tax deductible. The lender will organise the valuation if they require one. Which lender are you with?

Also, we are looking at IP NO2, is it better to redraw on our IP1 loan for this and how does this work??

If you have paid above the repayments into the loan then you can redraw it. Contact your lender and they should do this for you. This money can be used as your next depoosit. If it isn’t enough then you can ask to top up the existing loan.

I hope this helps.

All the best,

Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985

Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.