Refinancing without impacting negative gearing

Hi gurus,

I have a PPOR and IP
PPOR
- Split1 $300k
- Split2 $120k limit with 98k in the loan (22k available for redraw in the loan). I used this split to pay the deposit if my IP and make redraws to pay the ongoing expenses of my IP

IP
- 300k

I am looking to refinance the PPOR for a better rate however I would like to know how do i handle the 22k funds without impacting my Neg gearing.

My thoughts:
1) Move the 22k from PPOR Split2 directly into IP loan without mixing via an empty savings account. Any future IP expense is to be drawn from IP Loan. Would this work?

2) Alternatively, refinance the PPOR with $300k and $120k split and then redeposit the $22k into Split2. Somehow I dont think this would work.

Appreciate any of the gurus opinion here.

 

What $22k in funds? You only have not borrowed this amount.

1. dangerous

2. mixed loan

Don't do either

Refinance the debts:
1. $300,000
2. $120,000

and set up a 3rd split $22,000

See
Tax Tip 1: Parking borrowed money in an offset account Tax Tip 1: Parking borrowed money in an offset account

 

Thanks for your response Terry,

Since I have 98k loan outstanding on the 2nd split, should i do the following?
1) Split1 $300k
2) Split2 $98k
3) Split3 $22k

 

Yes

Sorry I meant to say $98k and not $120 at point 2.