Interest Only vs P&I help

Hi all,

I was wondering if there was anyone out there that could give me some input on a dilemma I have around IO vs P&I.

My investment loan is currently sitting at around 93% LVR (high I know but please don't judge) and I am trying to determine if I am better off paying extra in to that loan to get it below 90% (I have checked and I know that I can go to IO once I get below 90%) so I can go to IO sooner or if I should keep all money offset against my PPOR loan.

So basically
Scenario a)
Put all extra money into investment to get LVR below 90% to change it to IO to increase cashflow and have the principal I would be paying offset against my PPOR. This will minimize deductions in short term but I think increase long term deductions
Scenario b)
Keep money in offset against PPOR then when I have enough cash to bring investment loan under 90% pay a lump sum rather than investing my surplus cash
Scenario c)
I keep all my money in offset against PPOR and then in 2-3 years time when I have reached 90% LVR then look at changing to IO

Happy to explain anything in further detail if required

 

d) Debt recycle into the main residence, split and reborrow to shuffle debt over to the IP loan to get a lower rate, save tax and achieve what you wanted.

 

I am always happy to debt recycle, just wasn't sure how to make that work

If I reborrow cash using PPOR as security to pay off part of my existing investment loan, does that make the new split deductible?

 

Refinancing doesn't change the deductility of interest generally. you should get some tax advice.