Looks like you are right:
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HL8. Owner occupation and leasing
Note:
This clause does not apply to investment loans.
HL8.1 Consent to lease
If we give you the Loan so you can buy or build a home to live in, you must not lease the home without our prior consent
(see clause 11.2).
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You should get legal advice on who should be the mortgagee – I would not recommend a company generally.

It could be a company but who would own the shares?

There is no minimum requirement to live in the property, but it must be reestablished as the main residence again. You property could possibly exempt from CGT if you sold before Oct 2019.

I think this may be the one King referred to which is in the legislation:
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Example: You live in a house for 3 years. You are posted overseas for 5 years and you rent it out during your absence. On your return you move back into it for 2 years. You are then posted overseas again for 4 years (again renting it out), at the end of which you sell the house.
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Yes this main residence could get the full exemption – provided it meets the other requirements.

Benny wrote:

Hi James,

This is assuming the property is your MPR (as is assumed in brackets at the end of my quote).

You are right! I missed it, as I was unaware of the acronym “MPR”. I know the term as PPOR – Principal Place of Residence? Was the change to MPR (Main Primary Residence) a recent change?
And isn’t “main primary” tautological? I wonder who thought up that darling?
*confused*
Benny

I have never seen MPR either. In commonwealth tax it is known as the main residence (since 1997) and NSW tax it is called the Principle place of residence.

Bic could be totally exempt.

There can be advantages in using a loc and not mortgaging the property being purchased. One is that when you subsequently do mortgage it and borrow against it the lender can lend based on value and not purchase price.
E. G. Find a house valued at $100k and buy it for $80k using a loc secured against another property. 1 day after settlement apply for finance and borrow $100k X 80% = $80k. This works out to be 100% LVR based on purchase price.
Good in theory but difficult in practice.

The down sides are this would be treated as cash out borrowing and be much more restrictive than borrowing to buy the place.

Borrow against the main residence as and use this 25% as deposit and costs and borrow 80% against the new property.

Even though you may live in the new property consider the tax consequences of if you were to move out so as to structure things in a way where all the interest would be deductible on the full purchase price plus costs.

What would happen if they went belly up is that the debt would be assigned to someone else. Someone would buy their loan books and you would contine to repay as per normal to the assignee.