What I am trying to say is by taking the borrowed funds on a detour you a muddying the waters of interest deductibility. It is not clear if the interest on the $80k loan would be deductible. However to improve your chances I would suggest just before using that $80k you should pay it back into the loan and then reborrow it.

Consider the tax issues.

Interest is deductible if you borrow to invest.

With the offset account strategy you are borrowing to place money in a savings account. At some later date you may invest the money. Can you save you have borrowed to invest?

You may say you can trace the borrowings to the loan. But what happens if you put cash into the offset with borrowed money?

LOC on other hand are higher rates and are usually at call loans so not ideal.

Solution. Get tax advice from a lawyer or a tax agent.

I must admit to being the best but I am so good that I charge an upfront fee of $660.

Yes – provided you meet relevant laws

First thing to do is to tap into that equity by borrowing against your house under a separate loan. Then at the same time work out borrowing capacity.

Once you know what you can afford then try to narrow down areas and then buy. You could use a buyers agent for this step.

Don’t waste it!

Yes that is possible.

They would need separate titles to be able to be sold separately. It is possible.

Why are you seeking a broker out for this sort of advice?

Say you did buy A and B say 12 months apart. You lived in each of them for 12 months and then moved out and rented. 5.5 years after moving out of A you move back in and 5.5 years after moving out of B you move in for 12 months.

Then after about 12 years of ownership of property A you decide to sell it.

At this point either A or B could be cgt exempt completely but not both. So now you need to do some number crunching and work out is it better to avoid cgt completely now and potentially pay it on the sale of B later or is it perhaps better to not claim A as the main residence and keep the exemption going for B.

It could be worth paying a little bit on A to avoid a big bit on B later.

You only choose at the point of sale.