Need correct structure advice

Hello,

Situation; $250,000 PPOR IO loan. (CBA 5.07%) $15,000 in redraw from top-up loan, house was valued at $275,000.
100% offset account with ~$26,000 on board
$7000 credit card for most expenses paid in full monthly (never paid interest)
since we paid our car off (Aug) we have added $10k into offset account and this will continue.
Income last year was $150k before tax, single income and 4 dependents. (wife and 3 kids)

A couple of questions:
1. I have been looking into purchasing another PPOR. What is the best way to access the $15k top-up loan from the PPOR to help fund future PPOR? I believe this money can never be added to the future deductible debt when current PPOR becomes IP? Unless it was spent on improvements? Is a split possible with the $15k being part of a $25k portion?

2. Current PPOR is IO for 3 more years. I am interested in a lower interest rate which only seems attainable for P&I loans. If i split as above. i.e Loan A/B =$25k each P&I and he remainder left in IO + offset?

Am i overcomplicating something simple?

thanks
Ainsley

 

As in my current?
Ideally, yes and rent out.

If you mean the future one, then no idea i haven't found it yet.

Ainsley

 

Hi Ainsley,

1. Yes, very easy to split, just via a form.
2. You may be able to get a lower rate by getting your broker to submit a pricing request - that seems very high. You could also fix for significantly lower, but need to consider the offset. There's ways to make it work, you can fix some, and leave some variable. You may not need to pay P&I unless you really want to.

 

Likely split the existing loan so you can clearly show what was the original loan vs the redrawn amount. Your loan is significantly above what it should be - so the interest rate could be repriced down at the same time. This isn't a credit critical job for CBA, so they won't reassess the loan etc. Get it done while you can and get that rate reviewed as you're 0.5%+ out of market.

You may want to do the numbers to work out whether to go P&I vs IO and how the current IO OO fixed rates relate too, as this might bring the margin down between the IO vs P&I rates whilst maximising your cash flow to pay down the next PPOR.

 

Okee doke, So no real need to follow Terrys simple loan structure if i'm not planning on purchasing an investment property? I was under the impression that if i redrew money from he loan before it was "paid off" it would mix my loans.

When i split the loan, will i be able to withdraw the $15k nce it is then separate from the main loan?