[orbitorMember@orbitorJoin Date: 2010Post Count: 6]

November 2, 2010 - 10:06 pm

Matt007 wrote:

Gee, do you think they could settle for only $3Billion profit?

Makes me  sick to my stomach.

isn’t the point of a company (in this case a bank) to try and maximise profit?

I have to say that although I’m a mortgage holder and looking to buy more property, I can’t help but think that some cooling off on house prices is a good thing.

[orbitorMember@orbitorJoin Date: 2010Post Count: 6]

November 1, 2010 - 1:37 am

ryan57 wrote:

With the re-draw, am presuming if we were take out the 60k for other purposes, we could still only claim a tax deduction of Int on the current $300k, not the new bal of $360k.

That’s right, I’ve asked this question before. The point is the purpose of the redraw. It is regarded as a separate loan.

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October 18, 2010 - 11:52 pm

Terryw: I can see how that would help, but wouldn’t the loan situation on my current PPOR start getting very messy if I begin redrawing regularly to cover expenses on it? Or do you mean after it becomes an IP start doing that?

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October 15, 2010 - 9:26 pm

I understand now Dan42, the redraw is effectively considered a ‘new loan’ so the interest on that part of the loan cannot be deducted as it’s not accruing against the IP in ATO’s eyes.

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October 14, 2010 - 11:38 pm

Hi Richard,

Thanks for your response and your welcome The existing property is solely in my name but my partner and I are listed on the mortgage. Haven’t really considered who would ‘own’ the new property.

So I’m having a little trouble understanding. If I redraw on my PPOR now, then the balance would be much more negative. If I then convert that PPOR to IP when I acquire a new PPOR, the balance might be such that rent does not meet the repayments. Wouldn’t that in effect be making the converted IP a negatively geared investment?