If the market value of my investment property has increased and I refinance upto 90%. Can I still declare the new holding cost at 90% (interest paid on mortgage)?
Re-finance usually refers to going to another bank and shifting your mortgage from your old lender to a new lender.
Taking out an equity loan or line of credit loan against 80% of the value of your home is probably what I think you meant to ask.
80% if usually the max amount you can borrow in this fashion.Now it really depends on what the purpose of the new amount of the loan is being used for.
If you are using it for a deposit on another investment or for buying another investment that is income producing you can claim the interest,
however if it is living expenses , building a new pool in your main residence or buying a car, tv, ect. for a private purpose it is not claimable.80% of valuation = (Value of house * 80%) – existing loan amount
It would be a good idea to see how much you can borrow from the bank first before committing to another investment.
oaklands wrote:If the market value of my investment property has increased and I refinance upto 90%. Can I still declare the new holding cost at 90% (interest paid on mortgage)?
If you are asking can you claim the interest on the increased portion of the loan, then the answer will depend on what you are using the money for. The security doesn't matter, it is the purpose of the borrowings that determines deductibility.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
What will the rates be in 12months does anyone think they will be lower again? I am now waiting to refinance in late 09. So it will be interesting times.
80% is old news. Get your head out of the 80's Duck.
Re-fi + equity release 90% LVR is no worries.
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