Advice needed to separate a mixed loan

Hi All,

I am looking for advice to separate a mixed loan. My situation is I originally planned to refi both my PPOR and IP1. The equity released from PPOR would be used to fund the deposit and fees for IP2 purchase while the equity released from IP1 would be used to fund the purchase of IP3. However, due to the delay in refinancing the PPOR I needed to use the equity from IP1 to pay for the deposit of both IP2&3 ($20k and $15k). Now my PPOR refi is almost done, I want to use its equity to pay back the portion of the loan split of IP1 which I used to pay for the deposit of IP2 ($20k). So the main objective here is to move the loan used for IP2 purchase back to my PPOR split as per originally plan. Is it ok? If not, could anyone give me an advice to seperate the mixed loan?

Thank you.

 

Get specific tax advice. It depends on how you structured it, it may be just a refinance.

In the meantime, See
Tax Tip 44: How to Un-Mix a Mixed Loan Tax Tip 44: How to Un-Mix a Mixed Loan

 

And the other issue I have is after refinancing IP1, the equity split I got has a very strange rule that my broker is not aware and hence did not tell me about that. The rule is that the redraw is only available in the next cycle. So basically, I need to wait for almost a month to access the redraw amount. Due to the deadline of the deposit for IP2 (2 weeks after refinancing IP1), I needed to pay it directly from the offset account of the equity split loan of IP1. After that I used the remaining balance of the offset to pay down the split. In the next month, I redrawed to pay for the deposit of IP3. No other redraw made. Is there any issue with it? I know it is quite messy but it was out of my control.

 

Sounds like st g?

 

Thanks @Terry_w . It is Bank of Melbourne.

 

same thing, different branding

 

Yes that's correct.

 

I want to seek specific tax advice from you but cannot send you a PM to schedule it.

So is there any issue with using the cash (borrowed money, has not been mixed with anything) in the offset to pay for the deposit @Terry_w ?

 

Hi hieund85. I have disabled private messages as I used to get too many, you will need to email me or go to my website www.terryw.com.au or one of my company's/

Yes there are issues.

 

I was in your waiting list in Dec 2017 .

Come back to the issues with using offset money for IP deposit, is there still an issue if the split is IO? My understanding is the money is still borrowed money which is used for purchasing an income producing assesst hence its interest should be deductible. I have not mixed anything with it.

 

I emailed the waiting list but some bounced.