Mid next year we are moving out of our PPOR and into our IP (due to location). The PPOR is most likely going to become an IP. The only issue is the mortgage on the PPOR is very contaminated: it has a redraw feature which has been used many many times over several years. Now we are at a point where we are wondering what our best options are to try and make things less complicated. Just trying to figure out if there is much we can do about this kind of contamination. House value is approximately 440k. Inital mortgage 310k Contaminated mortgage 270k Have probably redrawn (for a misture of purposes, none of which we kept track of or receipts for) around 70k over the years. Hindsight... :/
Good golly. Would be a mess to work out. Probably best course would be to add all up withdrawals and deduct this from the mimium balance ever on the loan. This may give you a amount associated with the purchase of the property and it may be a reasonable basis that is accepted by the ATO. Seek tax advice.
See this tax tip too Tax Tip 44: How to Un-Mix a Mixed Loan https://propertychat.com.au/community/threads/tax-tip-44-how-to-un-mix-a-mixed-loan.4406/
You need an accountant or spreadsheet to work it out. It's complex as every transaction affects the principal and interests amounts. But here is a link to a spreadsheet I used, you can purchase it from this site: http://www.bantacs.com.au/shopping_property_apportionment.php
This is exactly what I was thinking and client's have done this in the past under accountants direction - VERY messy and a pet hate on lenders/brokers suggesting that 'redraw' is the same as an offset account.
That calculator looks great and only $10. It would probably take hours for an accountant to work out the relevant balances and that would cost a lot more.
