Probably a newbie question but are there any lenders that allow you to do this?
I have spoken to a couple that have said I would need to refinance with existing loan through them.
I could just redraw from my exisiting home loan and use the money as a deposit with the new lender but I would prefer not to as that property is going to become my PPOR and I don't want to increase my non tax deductable debt.You mean offering a second mortgage on your existing property?
That is generally not done, although would be possible.
You are better off just taking a separate loan with the existing lender and then use the money as deposit on the new property with the remaining from a first mortgage on a new property.
As for tax it won't work out any difference. Deductibility of interest on borrowed funds is determined by its use and if you are borrowing to buy a PPOR none of the interest on the borrowings would be deductible.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Sorry I think I explained myself very poorly, I mean, can I use the equity in a property I purchased with lender 'A' to borrow say 105% of my next property with lender 'B'…total LVR 90% of both properties for example.
Thats how I understood it.
And the answer is that you will probably not find a lender willing to do this. I think St George used to, but not any more as far as I know.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry.
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