To pay down equity loan or not

Just bought first IP, pulled out 84k equity on our ppor to fund the deal.

Interest rate on equity loan is 4.58% Ppor interest is 3.55% and new loan with new bank is 4.28

Currently saving 625 for shares. And each week ill put 250 ontop of ppor for emergency as interest per month is about 1000. Lately had to start paying the new ip loan off as they began construction. So the 200 has to come from somewhere so until there is someone in there renting ill take it from the share savings.

If the goal is to have 2 houses in qld nsw and vic is the best bet to start paying down equity loan to borrow again asap?

My partner is due in August with our 2nd so our servicing will take a hit hard.

 

Is the 84k a separate split?

If so, that interest will be tax deductible.

Your PPOR debt is not Tax deductible, so it would be the one to pay down first.

Though you would be better served to set up an offset account against your PPOR debt so you can use the money for a deposit when the time comes.

Redrawing is considered new borrowing.

 

The 84k is from the same bank we have ppor with. 2 separate loans paying 2 different interest rates. Does that mean the rent can pay it down making it tax deductible?

 

I'm not sure what you mean by "rent paying it down", but you can use what income you have to service the loan, is it interest only or Principle and Interest?

The interest that you pay on that portion of your loan on your home can be claimed back off your taxable income come tax time.

You should definitely consider talking to a property savvy accountant to explain your liabilities in greater detail.

 

The 6 building stages with the new bank is interest only. the ppor mortgage and equity loan are p+i

So I shouldn't pay down either if the rent services the equity loan (which is 113 a week) and the 200 a week for building?

 

You should pay down non-deductible debt before deductible debt (irrespective of the source of income). Deductibility is determined by the purpose of the loan (not the security). You should probably do some more reading on the subject. Search for "Terry's tax tips"