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New IP or debt recycle?

Discussion in 'Property Finance' started by Jimmy D, 5th Jan, 2016.

  1. Jimmy D

    Jimmy D Active Member

    19th Nov, 2015
    We have just sold our PPOR, currently renting until we settle on land then build. Will be building a PPOR including the land for approx. $540k total.

    Prior to the sale of the previous PPOR my finances were:

    PPOR loan: $250k - Bank A
    Equity loan: $90k - Bank A
    Investment loan $450k - Bank B

    IP worth approx $570k
    Old PPOR sold for $465k

    Prior to sale of PPOR I had troubles keeping the $90k loan open - long story.

    In the end I ended up having to pay out my $90k equity loan with PPOR sale proceeds.

    Therefore I have paid $90k off the investment property and will now have to lend another $90k for next PPOR – non deductable interest!

    PPOR loan will eventually be approx $420k in total.

    I am thinking of getting some advice but wanted if there were any suggestions on here?

    Not sure if I should get another IP this year or look at debt recycling (including possible paying IP loan interest with borrowed money).

    Any suggestions?
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    18th Jun, 2015
    Debt recycling will be slow. Buying another property to sell at a later date may enable you to pay off the PPOR sooner. And you can do both buy and recycle.