Refinancing Loan for IP

Hi
I am looking for some opinions regarding the loan setup for our first investment property.
Currently our PPOR has a loan of 265,000 with an offset running against it of 75,000.
We are going to refinance with another lender to buy an IP.
We have been advised to redraw our offset .
Refinance with a split loan PPOR 265,000 a P & I loan with an offset against it , to which we will put the offset balance back against when finalised.
The second split a IO loan of 650,000 for the IP.
If rent etc comes into the offset account and the loans payments come out it will that be an issue for tax purposes?

 

Dont do that.

Refinance with a new split and use the new split as deposit.
Rent in the offset won't result in mixing.

 

thanks for your prompt reply. We need to keep money that we can access for a buffer in the new loan setup.

 

Seems like a terrible structure involving cross collaterisation.

Better off:

- keeping your cash in an offset linked to the owner occ loan.
- setting up a second loan against your current property to fund the 20% deposit and stamp duty/costs on your IP
- set up a separate loan for the remaining 80% against your IP

Cheers

Jamie

 

Thanks for your reply I am new to all of this so trying understand correct setups and not sure I explained well.
The scanario we have been told is

As our PPOR has plenty of equity
the new loan setup
Loan 1 PPOR 265k with an offset . We can put our own saved funds into the offset to take loan 1 total down as they were not borrowed for this loan. Is that correct?

Loan B against current property equity IO 620k to buy IP.

Why do we need a separate loan for stamp duty etc.

And does the rent ,expenses for Ip and loan repayments to each off the loans come from the offset account ?

Thanks

 

Yes to all. Except no need for separate loan for stamp duty as it can come from the one loan for the investment.