Re-mortgaging Investment Property

Hi,
I'm in negotiations about switching my mortgage.
I have a mortgage on my PPR and I have a mortgage on my investment property which has a small remaining balance (~50K).

With my new lender, can I re-balance the two, so I would e.g. owe 80K on my investment property mortgage and 30K less on my (larger) PPR mortgage?

The benefits could be two-fold, I'd have a smaller principal on which to pay interest on my PPR, but I'd also have more interest on my investment mortgage to claim back against rental income tax. In other words, I'd be shifting some of the interest onto the investment mortgage, but that would then be interest I could claim back ....

Is this allowed? I imagine I'm probably missing something ....

Many thanks,
/M.

Your tax situation wouldn't change, you couldn't claim any extra with this plan.
Only funds used to purchase the investment property can be set against tax, which property they are secured against isn't relevant

As previous poster said you cannot do this tax wise. But if you do renovations on your investment property and borrow for this purpose that will be allowed for interest relief.

I'd be surprised if your lender gave you a good rate of interest on your investment property, and with interest rates likely to increase you could be paying a lot.

Plus the possibility that the govnt may reduce the amount of interest claimable on investment properties.

Considering the last two posts that you can''t claim the extra interest on your investment property -unless you suddenly found 50k worth of renovation bills -then don't bother with the idea.
It'll end up costing you more.

Berni said:

Your tax situation wouldn't change, you couldn't claim any extra with this plan.
Only funds used to purchase the investment property can be set against tax, which property they are secured against isn't relevant

Click to expand...

Thanks, that's the information I was missing. Seems obvious I guess when you say it ...

Thanks again.

/M.