Convert loan from investor to owner occupier

Discussion in 'Loans & Mortgage Brokers' started by liverpool77, 2nd Sep, 2015.

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  1. liverpool77

    liverpool77 Active Member

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    http://www.smh.com.au/business/bank...catch-out-some-borrowers-20150902-gjd46l.html

    See thread from smh today explaining how many lenders switching from investor lending to owner occupier loans. I have been advised my rates could be reduced by doing this also however my concern would be the "reason" of my loans are for investing and not ppor causing issues with deductibility. Have any others had banks or brokers advise them of this/push them in this direction as article also suggests many have moved loans from investor to owner occupier. Is there not a requirement to prove the purpose of the loan so people could not just change it with no consequences? (Unless of course if audited by ato one day!!).
     
    liverpool77, 2nd Sep, 2015
    #1
  2. Gingin

    Gingin Well-Known Member

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    If you are occupying the place you can change to the occupier rate.

    The security of a loan does not matter, it is the purpose.

    the purpose of the loan needs to be for investment for a deduction eligibility. If the purpose was to buy the occupied place then it will not be a legitimate deduction.
     
    Gingin, 6th Sep, 2015
    #2
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Its not the purpose but the use the borrowed money is put to. If a loan was used to invest then it would be deductible (the interest) if or when the property was available for rent.
     
    Terry_w, 6th Sep, 2015
    #3
    Gingin likes this.
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