I have a Portfolio loan outstanding of $130k @ 6.92% on my residence near Sydney airport valued around $650k, purchased in 2000 for $360k.(Rental potential $400-450/wk)
I have a separate I/O loan of $335k @ 7.07% on a rented property owned 2.5yrs at New Farm, Brisbane, current value around $400k, rented at $350/wk gross.
I may be relocating to the Gold Coast and wish to purchase a house there in which to live.
I can draw down $109k on my current residence Portfolio loan to deposit a Gold Coast property to live in, however was wondering if there is a way of extending the debt up to the original purchase price of $360 (in order to reduce the debt on the Gold Coast house I would live in)? Hope this makes sense!Hi Robyna and welcome to the forum,
You can increase the loan on your current PPR up to 80-90-95% etc, but this will be classed as non-deductible debt regardless of the security held over the loan, as it’s the purpose of the loan that determines deductibility.I would suggest you extract 20% deposit and closing costs via your current PPR with the remaining 80% secured by the new PPR, in this scenario you are borrowing 100% of the contract price plus closing costs and avoiding LMI.
BTW, based on your current level of borrowings ($465K) the interest rates quoted seem very excessive, Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Thank you for your advice Steven. Re interest rates quoted, they are both with St George (Portfolio @.5% discount for home loan; Std Variable @.25% discount for investment property) If I purchase a PPR on the Gold Coast my total borrowings are likely to rise to over $1m, so I will be shopping around for the best deal! Thank you again!
Hi Robyna,
You should be getting .7% off the SVR (6.62%)Rates are important but unfortunately all to often the correct lending structure is overlooked. Cheers.
Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
Yes Steve, the loan structure is my problem now since I might be turning my PPR into an IP, not my original intention, at least not at this stage anyway. Not a good idea to have 80% loan on my new PPR but can’t see any way around it as I’m not prepared to sell either of my current properties now.
Thank you again for your assistance.Hi Robyna,
Perhaps consider a 100% offset linked to the new PPR debt, this may help reduce the non-deductible debt at a faster rate, cheers.Regards
Steven
Mortgage BrokerMobile Mortgage Market
Ph: 0402 483 216
[email protected]
http://www.mobilemortgagemarket.com.auPLEASE note comments made should not be taken as specific taxation, financial, legal or investment advice.
I think you sould read the following article which discusses this scenario…
http://www.prosolution.com.au/articles/trading.pdf
Cheers
Stu
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