can i change our current mortgage into a invesment loan and rent our place out and take out a new mrtgage to buy a bigger house to live in and keep our unit as an investment.
Kev2008,
Yes you can do that as long as you have enough equity or cash to satisfy your Lender(s) LVR and have sufficient rent income + salary to service these 2 loans.
You also have to be careful how much you claim as a tax deduction on the "first" property you purchases (the one that will become your IP). You gotta be careful that your current loan balance on that IP is not "infected" by redraws for private usage. E.g redrawing from that home loan to pay for holidays or groceries.
If "infected" it would be hard to apportion the loan balance between investment related and private-related. Hence the interest expense each month would be difficult to apportion as well.
It depends if you have an offset account, used a redraw facility or just paid the bare miminum loan repayments since the start of the loan.
Feel free to shoot me an email on your speciific circumstances and I might be able to give a more detailed answer to your question.
You probably need a valuation once you change the status from PPOR / Main Dwelling to Investment Property if the other new house is going to be exempted from CGT due to now being a main residence exemption.
(There is a way of having it exempted but then the new property will not be exempted as you can't have both and there is a time limit)
Otherwise if you sell the investment house in the future it will be difficult to work out which part is PPOR CGT exempt and which part is capital gains taxable.
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