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I am mostly with the NAB. I use multiple mortgages against a single property no problem. The only issue I have is NAB always assumes cross securitisation, so I have to check them every time we refinance to keep the loans separate. I pay 3.8% variable on my PPOR, and 3.83% on the investments.
Corey when you say split you simply mean multiple loans right?
LOL right back Schnake, that would certainly be his preference. It’s hard to get a start in Sydney, and it’s not possible to take the same path we did. Our starter PPOR was $145k in 1993, it just changed hands again for nearly a million. Just been trying to think how to advise his way forward.
And thanks again Terry I’ll talk to our accountant about how to set it up, and my lawyer about the wording in the contract.Thanks Terry that is excellent advice. I had considered various options of getting involved but had not taken my thinking that one step further that of course if I wrote it all up it would create a clear paper trail for the ATO and he could repay it by refinancing at some point, and putting his deposit into an offset on the larger loan. Thank you!
I wouldn’t use your redraw if there was another option. You need to maximise the tax deductible borrowings, and reduce the non tax deductible, and keep good documentation that the loans you are tax deducting interest on have only ever been used to buy IPs, to show the ATO if you ever get audited.
The redraw could be used if you don’t have enough equity, but that’s not going to give you the biggest tax benefit. I am three years out from paying off my PPOR, (the non tax component at least) which will make all the fuss with setting up two new loans every time well worth it.If you have enough equity you can borrow 105% (ie purchase price plus cost). I borrow 80% secured against against the new IP and a second loan for 25% secured against my PPOR. Over time as the IP has increased in value I have secured both loans against the IP. I pay IO on the IPs and as much as I can on the PPOR, well in excess of the P&I required payment. I also capitalise running costs, such as repairs, rates (but not interest) paying from a LOC and claim that interest and put the extra cash into my PPOR mortgage.
