Moving Off Line of Credit - St George

I've got a Line of Credit with that I use for IP deposits etc which has sub accounts that are paid down and zerod over time then recycled into other investments. In the current environment and especially moving forward I see these as high risk and am looking to transition it to a standard loan product with splits.

Half the facility is undrawn ie available credit and I am wondering what the best way is to transition across to a standard resi loan with splits but still keep any available credit as buffers...either available for redraw or preferably drawn before settlement and transferred into an offset

 

ask them to convert the drawn amount to a standard loan. If PI there may not be a reassessment

 

Thanks Terry I was going to run with PI for that reason - can the loan be fully drawn before switch and then put in an offset where I can then still use those funds for IP expenses and claim interest as deductions legitimately (when the amount in offset falls below the limit of the loan?)

 

That is something you would need specific tax advice on. I wouldn't recommend it.

 

Alternatively I guess the other option is to fully draw prior to switch then pay down most of the loan where I can redraw legitimetly when needed?

 

I wouldn't want to have any redraw in the current climate, banks can reduce the limit down and just like that your redraw disappears, especially in the current and future credit climate. Offset is preferable, just my 2 cents.

 

Perhaps borrowed money could be kept in offset accounts and then chucked back into the loan and redrawn just before use - this should at least remove the risk of redraw being cancelled.