Ip2 timing and strategy

Hi all
Family income (140k me and 140k partner)
family home bought for 1.4 mil.
Loans 1 on family home 980k
Offset account against loan 1 just crossed 980k
Loan 2 split on family home 50k
Believe excess equity from last time. But did not use. So own 50k on our prop..

Ip 1 - purchase 760k Purchased last year July
Loan ip 1 - 780 k
Including stamp duty costs
Rented 830 per week as it is a detached dual occupancy - house plus granny flat..

now we want to purchase ip 2
Guessing our prop last year was valued at 1.6 mil and sure it will be same or even a bit more with today’s comparable..

how do we best structure our loans for ip2...
what should be our thinking or questions moving forward..

Does our big offset account balance limit how much we can borrow for next ip

 

You should be thinking how can you maximise borrowing capacity while minimising tax and interest.

What is best for you will depend on the circumstances and how much you want to borrow.
You could potentially debt recycle and borrow to buy the property without applying for a new loan and get owner occupied rates, with the new property unencumbered.

 

Your big offset balance will definitely limit the amount you can borrow. You might need to look at debt recycling some of it as a deposit (or even the whole lot, depending on capacity) to be sure the debt will be deductible. Or, using it to reduce your PPOR limit, and re-borrowing, depending on your situation.