The ideal Loan Structure where the first property is an investment

Discussion in 'Loans & Mortgage Brokers' started by Terry_w, 4th Jan, 2016.

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  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    I was in the CBD, but am now semi retired so only offer meetings by Skype for the moment.
     
    Terry_w, 31st Jan, 2017
    #21
  2. PurpleTurtle

    PurpleTurtle Well-Known Member

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    I'm sure this is a silly beginner's question, but I'm still trying to get my head around these things.

    Why not just use the cash to only borrow at 80%, then when ready use this equity in IP1 to help the purchase of IP2 or PPOR?

    Is it because that 20% you used for the deposit could be earning better money elsewhere instead of just reducing loan interest which is deductible anyway?
     
    PurpleTurtle, 4th Feb, 2017
    #22
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You would to try to avoid using cash so that when you do buy the main residence it is tax effective - use borrowed money to invest and cash for non-deductible purchases.
     
    Terry_w, 4th Feb, 2017
    #23
  4. PurpleTurtle

    PurpleTurtle Well-Known Member

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    Ah, that makes sense. Thanks @Terry_w
     
    PurpleTurtle, 4th Feb, 2017
    #24
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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Note that this is a mistake IP 2 in the above should be IP 1.
     
    Terry_w, 7th Jul, 2023
    #25
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