Browse Forums Home Finance 1 Jun 02, 2015 4:40 pm Hi All, i am planning to get a second property, as i have been paying extra repayment, i am thinking to redraw from loan account and put towards the new property. Want to rent out current and move to the new property, after doing much research online,it seems like if I redraw from current loan i will not get much tax deductible since is based on before redraw? Is this still correct? Anyway around it? I sign up my loan direct to the bank, so i wasn't aware the difference between 100% offset and redraw facility, so been putting extra into loan account directly. Thanks. Re: Loan Qs 2Jun 03, 2015 2:03 am Hi Winderic, Unfortunately you have committed the worst sin for investing. As you mentioned by paying extra into your current property, you have effectively missed out on deductions going forward. A lot of people make this mistake. You would have best been served by having that money in an offset, and then using that money as a deposit for the next property. Basically whatever the outstanding balance is for your current loan is the maximum that is deductible. There is no way around it. If you redraw from it now, all that you are doing is creating a mixed purpose loan which makes it confusing. You need to set up a separate split instead for whatever deposit you might need. Also change the initial loan to IO. With the recent policy changes that lenders have introduced in respect with investment properties, it is becoming tougher. Get a decent broker to go through your scenario to come up with a proper strategy. Cheers Tom The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 20091 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 36596 How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 12363 |