Tax Tip: Simple Loan Structuring Strategy which is Tax Effective These days it is getting very difficult, for some, to restructure loans down the track. This may be due to serviceability reasons. e.g you get a loan for a $500,000 and pay it down to $400,000 and then want to set up a LOC secured against the property - may not be possible because your situation may have changed or because of the hardening up of the lender’s serviceability criteria. So plan from the start, especially with non deductible debt. With a PPOR loan of $500,000 you could simply split the loan into 5 or so splits such as: $50,000 Split A $50,000 Split B $50,000 Split C $50,000 Split D $300,000 Split E The splits can be adjusted to suit you needs. The smaller the splits the quicker you can start investing without creating a mixed loan though. I have just done one with $25k splits. This way you can concentrate on paying down Split A first and once this has be achieved, don’t close this loan, but use it to invest. Borrow to invest and then implement a debt recycling strategy such as outlined at Tax Tip 2: Debt Recycling https://propertychat.com.au/community/threads/tax-tip-2-debt-recycling.1472/ This can help you pay off Split B faster which can be used to invest further. Also consider combining it with Tax Tip 4: Borrowing to Pay investment expenses https://propertychat.com.au/community/threads/tax-tip-4-borrowing-to-pay-investment-expenses.1554/ Consider using Interest Only loans for all the loan splits and set up the offset attached to Split A first and don’t pay the loan down but put the extra money into the offset and then when you want to invest ideally you would not pay the loan down, but borrow first. Only where further borrowings are no possible should you start to use the money - but you must first pay down the loan and reborrow. Tax Tip 9: Don’t use Cash in Offset account to Invest https://propertychat.com.au/communi...nt-use-cash-in-offset-account-to-invest.2355/ Where you are wanting to invest in shares you should seek financial advice as only a financial planner can advise on this. Where you are wanting to invest in property anyone can advise on this currently. But since there is a tax side to this you need to speak to your tax adviser about deductibility of interest etc.