Hi – I need some help with this. I am looking to move interstate for a job and need to rent out my current property. Can I increase the mortgage amount on the current property to help me pay for a new house and claim gearing against the current property with an increased mortgage?
Drummoc,
The short answer is no.
The purpose of the loan makes it deductable not the security.
So if you borrow to buy an IP, shares or anything that brings in an income then you can claim the interest.
If you borrow for your home then you cannot.
Both examples are regardless of what you borrow against.
And it goes the other way. If you borrow against a home to buy an IP, Shares etc then this loan will be deductable.
There are a few ways around this – none cheap.
Sorry to give you the bad news.
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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