Question about surplus - investment loan refinance

Hi,

I just got an investment loan refinanced as a fixed rate loan. After the settlement, bank put surplus (around $700) into my savings account.

Bank says because it's a fixed rate loan they can not put surplus into loan.

Loan balance with first lender just prior to settlement was $599,300. It was $600k when we submitted the application. So refinance loan amount (with 2nd lender) is $600,000.

Surplus of $700 is being put into my savings account.

What are the tax implications of this? I assume I have to apportion interest because technically the whole of $600k is not used for investment purpose.

It looks like mess but what else could I have done?

 

put it back in the loan. small mixing not worth the worry. 700/599,300 = ?

You can pay up to $10k into a fixed loan I think.

 

Jeez banks annoy me when they tell lies like that. Any $$$ can be repaid into a fixed rate loan. The issue to determine is what the bank threshold is before they will apply a break cost to part of the loan. Some its lower like $10K and some are $25K etc As Terry says it wont be material enough. By repaying to the loan it avoids concerns that the loan is not fully deductible. ATO likley wouldnt attack the blending as it passed through the savings as it repays the loan to its actual deductible use and if done within the month the formula doesnt care anyway. trivial.