Tax impact if refinancing PPOR loan with existing split already used to purchase IP

Hi,
I am looking at possibility of refinancing my PPOR to another banking institution due to limited split ability.
I have 1 split I/O acc which have been used to pay for an IP. I am looking to change the account into a LOC when i refinance it.
Since the fund withdrawn from new loan doesnt seem to be directly used to pay income generating investment, would this have a tax impact to the interest that I can claim for tax deduction??
Appreciate some advice

 

If you refinance existing loans in their current form (ie keeping amounts the same) the deductibility doesn't change. If you do a top up, for eg changing a $100k loan into a $150k LOC, the new funds become deductible when you use them for investment. While they're unused, they aren't accruing any interest to deduct.

BUT if you do a top up and use some of the funds for non-investment then it becomes much more complicated. It's better to create new loan splits to keep deductions clear, even when it's all for investment purposes.

 

Noted. Thanks jess