Yes I saw Reduced home loan post, also I saw comments for their previous posts.
I am with Athena for about 7 months. Simply they are Awesome!
Owner Occupier Home Loan 2.59% (C.R 2.55%) @ Athena Home Loans
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Kas on 03/03/2020 - 15:10 athena.com.au (5149 clicks)
Last edited 03/03/2020 - 15:53 by 2 other users
Last edited 03/03/2020 - 15:53 by 2 other users
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Yep, they hide that. You'll just get a bog standard email saying sorry, you don't meet our criteria that we wont tell you about. Enjoy the impact a declined application will have on your credit rating!
So…what is the minimum amount?
Pretty sure its $250k, that was the min amount last time I checked Athena.
Hey Planky we're definitely not trying to hide it. But given the feedback here, it shows that we could make this clearer on our website! Our minimum loan size is $100k and maximum is $2m. We detail this at https://www.athena.com.au/home-loans/features. When you go through the application process, if you enter a loan amount less than $100k or greater than $2m, an alert comes up that tells you that the requested loan amount is not possible.
We're really sorry we weren't able to help you out. We would love to look into your application and reach out to explain the reasons behind why we had to decline it. Please feel free to get in touch with one of our Loan Experts via call at 13 35 35 or email [email protected].Do you provide loans for new home builds and accomodate for building progress payments? Unclear of the process and how easy that would be with Athena…
@MuddyClear: Hey BongoOB, we don't do construction loans unfortunately :( We could look at refinancing once the build is complete and would need a certificate of currency for proof of build completion.
@icedtea229: That’s a shame. Perhaps look into incorporating construction loans as it’s significant.
P.S. Not sure about this certificate you ask for. Once house is complete it becomes like all the other houses that could be refinanced.
@MuddyClear: Sorry we can't help right now BongoOB. A certificate of currency is a document issued by your insurance provider that confirms building your insurance policy is effective and valid. You can request a certificate of currency from your insurance provider by phoning them directly or by logging in to your personal online account. Otherwise, your insurance broker can request the certificate on your behalf.
@MuddyClear: Ah sorry just noticed my typo above. It should have said "your building insurance". It's the provider you would choose to go with for your building insurance.
So the rep says that you are informed so who should I believe?
It doesn’t show as a declined application in your credit file. It just shows the enquiry with no taken up loan. One enquiry won’t impact your credit score too much.
I just tried, 100k it seems.
Is this rate available with an offset account?
Nope
The other factor most people don't consider is that an offset with a non-bank or redraw facility is different from an offset with a regulated bank as the latter is a Government guaranteed account. Most likely scenario with the former if your lender undergoes stress is that your offset account and loan are rolled up - i.e. you don't lose money but you do potentially lose liquidity.
Good to bear in mind.
@ely: Not to be too alarmed but good point from Croseks too:
"If the market tanks and the bank needs liquidity. Has happened plenty of times all over the world, the 2008 financial crisis would be the most famous in recent times. Check this site out for how many banks have collapsed recently : https://www.fdic.gov/bank/historical/bank/"
We could face another GFC due to Coronavirus spreading across the world. If so, many lenders may fail, especially a small online non bank lender not backed up or bailed out by the government (link about 558 banks failed in a 20year period). In some cases, the lender would recall the your loan and you will be forced to repay the loan or refinance, which may be hard if you lose your job/made redundant in a GFC. This is unlikely but not impossible.
This is unlikely but not impossible
Agreed; not impossible, but unlikely.
I'm not seeing the connection to the redraw vs refinance discussion though; a bank that can recall your loan can recall it whether it's with an offset or not.
@Len -Bundle Loans: Obviously not relevant to larger loans but doesn't the federal government guarantee up to 200k In case of the institution defaulting.
In some cases, the lender would recall the your loan and you will be forced to repay the loan
This is so very very unlikely. What would actually happen is that if your lender went under and wasn't sold as a going concern to another financier, the assets from that company (ie. your loan and others) would be sold at a discount to someone else who would collect your repayments. It would have to be some unfathomable financial meltdown where all banks and FI's were going out of business so much that no one would even want to buy the assets, and then for some reason governments and central banks didn't step in to take over the administration of the assets.
Why would anyone want to do a mass call on home loans when effectively they might make less on the dollar than just letting the loans sunset and collecting the repayments for the next <30 years?
Just to clarify the tax issue. I have worked for the ATO and Big4 accounting firms and am a tax lawyer (and a broker).
The tax implications of an offset account vs redraw:
Under redraw, you may be denied a tax deduction even if the redraw is from an investment loan, if you redraw funds for a private purpose, eg car, holiday etc. This may cause a problem for current investment loans, and also if your owner occ turns into investment one day - which happens more regularly than people think, unless you know 100% you will never change addresses until the day you die. Under offset, you do not have this issue.
Example from ATO:
https://community.ato.gov.au/t5/Investment-property/Redraw-f…"Generally, you are entitled to deduct interest charged on an investment loan where the whole of the moneys advanced to you has been spent for investment purposes such as buying a rental property, or a home purchased with borrowed money that has been turned into a rental property. However, if you redraw from that loan, then the redraw is treated as a separate loan to you. If you spend the redraw money in a different way to the originally investment related borrowed money then you will have to apportion the interest charged on the loan into deductible and non- deductible parts. The details in this approach are explained at TR 2000/2. You can find an example from the ruling whcih explains how the ATO treats redraw situations. "
Example from ATO Tax Ruling TR 2000/2
https://www.ato.gov.au/law/view/document?docid=TXR/TR20002/N…Full ATO Tax Ruling TR 2000/2
https://www.ato.gov.au/law/view/document?docid=TXR/TR20002/N…@Len -Bundle Loans: Yup, which is why I specifically point out that if it's ever going to be an investment property they you definitely do need an offset.
The law is insane, but it's the law.
@Len -Bundle Loans: Hey Len, in your experience what are the odds of someone being audited? just a regular 1-2 property payg investor.
@whoopdeedoo: The same as any other person essentially. A common misconception is the Ato don’t come after small fish - not true. They have departments which only audit small fish.
@whoopdeedoo: By posting this you have now flagged yourself for audit!
And by me replying I'm also up for audit. Damn you whoopdeedoo, damn you to hell!
@Len -Bundle Loans: If you redraw on a home loan to conduct a renovation on the secured property of that loan, do you still have to apportion?
@Len -Bundle Loans: Dam, didn't know redraw is so complicated. Now I know why I'm not born accountant.
@Len -Bundle Loans: Agreed with Len, if you ever think the house might be used as an investment property, only get a loan with an offset facility and never put extra money into the loan redraw, just put it in the offset.
Take the time to those links above.
@Len -Bundle Loans: Could I ask, if I turn my owner occ home into investment one day, can't I just refinance my home loan to one with an offset from that point onwards?
Is there any implications to the past interest deductions I've paid while the home is still owner occupied?
I'm confused because your statement kinda implies past interest payments while home is owner occupied is also affected by future decisions to turn it into an investment property?
Thanks in advance for the clarification.
The answer is - it depends on your circumstances. Not all of us have consistent income, so an offset + a 55 day interest free credit card is dead easy to manage, happy to pay a small interest surcharge for this benefit.
The 55 day interest free credit card already provides the same benefit though; what does the offset add to that?
It does depend on your circumstances though, the planning-to-make-it-an-investment-property caveat is important.
@ely: Oh boy! Strap in!
Having an offset account can you give plenty of benefits for both PPOR and IP loans. Firstly, whatever amount you have in your offset lowers your overall interest payment. You can use the offset to keep your interest low whilst having access to that money whenever you need (for emergencies, for everyday spending, for new car etc…). You can use the offset for debt recycling i.e. turning your non-deductable PPOR loan in a fully deductable loan. At the end of the day, the money in your offset is available to use however you like whilst providing you with discounted interest.
Please do not confuse a Redraw facility with offset. Very different! Redraw can be called in at any time (bank run anyone?) also Redraw you are actually facilitating a brand new loan each time you take it out, meaning that you can cross collateralise your loan and lose your interest deductibility!
A credit card is just another loan, its not your money.
If you still don't understand why having an offset is hugely beneficial then please do not invest and continue to support our economy by spending more :)
@croseks: Yeah, I get it… but I'm pretty sure you didn't read my comment at the link, because I'm spending less via my redraw than I would via an offset.
The only relevant part to your comment is, as I've pointed out, the investor aspect which is relevant if you plan on turning it in to an investment property at some point (and accepting the CGT impact of that rather than just keeping it as an owner occupied one).
The sort of misunderstanding as present in your comment is why I go around pointing out to people that they probably don't actually need an offset. Lots of people make the same mistaken assumptions you do.
@ely: Pasting again here because people don't click through links.
For tax reasons, if you plan on converting your home in to an investment property in the future, and expect to claim interest as an expense, then you will want an offset because the redrawing makes this a mess (which is crazy, but it is what it is). Note that you can rent out your primary residence for quite a while before it necessarily has to become an investment property and this might be better for CGT reasons than claiming interest as expenses, depends on your circumstances, talk to your accountant, etc.
Otherwise many people seem to think that they need an offset account, but you can do fine using redraw. Just put all of your income in to your mortgage, all of your expenses on credit card, and redraw to pay the credit cards in full every month. This works out marginally better than offset in terms of interest because the interest free period on the credit cards lets you keep a higher average balance against your mortgage than if you were paying this out of your offset instead - the difference isn't likely to be large though, the key thing is that you're not actually behind as many people seem to think. You'll also get some additional benefit in the form of rewards points / sign up bonuses from running everything through a credit card, how much this is worth to you is up to you, but a small added bonus.
Offset is probably easier, and doesn't require you to be as organised (and you can still run everything through a credit card if you want), so if you want it and can get it for free then there's no downside to it that I can see. I just wouldn't pay more for it, and the cheapest options tend to come without it (e.g. TicToc / Athena have very good rates, but offset is a paid extra).
Note that you can rent out your primary residence for quite a while before it necessarily has to become an investment property
How long can you rent it out for?
@MuddyClear: Generally six years but if you're thinking of doing so talk to your accountant rather than randoms like me on the internet. Caveats apply.
@ely: This is incorrect. Please don't spread out information that you don't fully understand. The six years rule is solely for the purpose of CGT calculation.
A property becomes an investment immediately when you receive rental income from it. Hence all of the difference between offset and redraw apply immediately at that point.@dhnqt: Fair enough, which is why I include
talk to your accountant rather than randoms like me on the internet
Can you link to more relevant information to explain what you mean that? I take it that you mean you can claim expenses (e.g. interest) against income earned immediately?
Offset is probably easier, and doesn't require you to be as organised (and you can still run everything through a credit card if you want)
Biggest thing for me wanting an offset over a redraw is the money is mine with an offset. The bank can't just decide they want to 'sweep' that money into the loan and I can no longer access it like they can with a redraw.
Plus the advantage that I have one of my offsets linked to my CC, so when I need cash I can withdraw it straight from my offset using the 'Cheque' account through an ATM/Eftpos. Most redraws (that I've seen) require a minimum amount that needs to be transferred (you can't just use it as a transaction account when needed like an offset).
Just those 2 benefits (let alone the other benefits) make an offset a lot more usable for actually needing to use my account/money in everyday life. In reality people want convenience nowadays, if you're having to screw around so much with setting things up, transferring money all the time etc. with a redraw, then people will just leave less in their redraw and not make each dollar they have work for them.
Biggest thing for me wanting an offset over a redraw is the money is mine with an offset.
Yeah, I have no particular issues or concerns with this. In the unlikely even this happens I will refinance.
when I need cash I can withdraw it straight from my offset using the 'Cheque' account
I don't use cash (and don't understand why people do, in general). I transfer money once a month to pay CC bills and that's it - not very much work at all :) Because it all goes on credit my dollars are actually working harder than if you're withdrawing cash from an offset - you start paying interest straight away, I only start paying it up to 55 days later.
On the minimum amount thing, unsure how common that is. The offsets I've had have had no redraw fees and no minimal amounts.
Yeah, I have no particular issues or concerns with this. In the unlikely even this happens I will refinance.
That's not just a 5 minute job though if the bank decides to do that (it may be unlikely, but it's at the bank's discretion if they do and you have no say in it as it isn't really your money, the bank just allows you to access some of it).
I don't use cash (and don't understand why people do, in general)
I mostly don't either, but there's still plenty of places nowadays that don't accept card (or have ridiculous minimum spend/surcharges for using credit) so the times that EFTPOS is free I can just use that or quickly go and get cash out from an ATM.
On the minimum amount thing, unsure how common that is. The offsets I've had have had no redraw fees and no minimal amounts.
Offsets don't because they're just a transaction account, some redraws do (I should have said 'some' instead of 'most' in my first post).
Mostly seems a thing with some of the bigger banks (doesn't seem that Athena and most of the 'better' ones have any minimum), and generally you need to have an account with them as well to transfer the money into to then withdraw it. Athena seems slightly different with a traditional redraw though based on this table, but still find an offset superior for myself and the way I use my loan and money.On the minimum amount thing, unsure how common that is. The offsets I've had have had no redraw fees and no minimal amounts.
Sorry, I meant redraws :) The redraws I've had have had no redraw fees and no minimal amounts.
That's not just a 5 minute job though if the bank decides to do that
No, it's a big of a pain - but given how unlikely it is it's a risk I'm willing to take.
@ely: I do agree with a lot of your points, just figured it was also prudent to give the other side of the story with regards to offset.
Obviously what you have with the redraw works for you, and the offset works for me. Just as long as people consider both rather than just discounting one or the other then that's the main thing.
@Nousernamehere: Yeah, fair. I think that everyone is pretty much sold on offset though so I don't need to talk it up - most people just go "oh, offset saves me money" and think no further and it's not quite that simple!
There are pros and cons but I think many people on offset are paying more for something they don't need, especially the big banks that tend to give a much worse deal for an offset. Tic:Toc is only an extra $10/month I think, which isn't much to pay if it's going to make a difference to you.
@ely: Sorry I didn't read your linked comment lol.
Yeah you are correct about turning a PPOR into an IP.
However consider this scenario:
You have a PPOR loan (your house that you live in) and you have $50k in cash that you want to invest into shares. By recycling that debt through an offset account you can make $50k of your PPOR loan deductible, you haven't borrowed new money. This needs to be talked about with your tax adviser as a 'clean' offset needs to be setup. Using this method you can cut down your mortgage/boost your savings by anywhere from a few thousand to tens of thousands more per year.
@croseks: All good, I should have pasted it in rather than linking :)
That certainly sounds like a creative use of an offset and, assuming it works as you describe, would certainly be a reason to pick an offset rather than redraw. I would stick by my "you probably don't need an offset" comment because this sounds reasonably niche, but there are definitely cases where an offset is the right thing to do.
Do you have any links to further info about the approach you describe there? I'm definitely curious!
By recycling that debt through an offset account…
What debt are you talking about?
you can make $50k of your PPOR loan deductible
You said you want to use $50k on shares…
Not sure what you are trying to do here.
@MuddyClear: If you have a mortgage, credit card etc.. that is all debt.
Debt recycling is turning non-deductable debt (PPOR loan) into investment debt which is fully deductable.
Spending your own money on investment is not deductable i.e. its not tax efficient.
Debt recycling is turning non-deductable debt (PPOR loan) into investment debt which is fully deductable.
Are you saying turn ppor into ip? Confusing to me what you are trying to explain.
@croseks: And what about the flexibility if you later decide to switch from owner occupied to investment or vice versa? With offset account, you can move excess money to the right place when needed.
Edit: Sorry, ely posted more detailed comment just 3 minutes before..
@leiiv: Yeah, that's the comment that I originally linked to, but I should have put it in line rather than expecting people to click through :)
Oh the negs, the negs. Neggers, please read the link (or the pasted version down below).
Are they awesome for any other reasons aside from the rate?
No application or exit fees (except government fees), and new and old customers will have the same rate. Most providers gouge their existing customers but keep them because of their exit fees, and offer better rates for new customers. They have a pretty good offering.
I'm with Tictoc homeloans and they are pretty poor with interest rate reductions. Currently on 3.09% and their website says they are going to reduce the rates but not until 11/03.
Yeah I've been similarly disappointed with Loans.Com.Au. Don't pass on full cuts and usually take 30 days or so to do so.
They are hopeless. Moving out soon, enough of holding back due to the fees associated. Will never go back near them..
I'm on 2.84% with Tic:Toc and already asked them to rate review today once I noticed they're advertising 2.79% (noting that the rate cut had happened and I expected that to be passed on too, and highlighting other current offers like Athena's, and those with huge cashbacks and pretty competitive rates, noting also that I was well ahead on repayments and very much willing and able to refinance if Tic:Toc was no longer the best option for us).
Was there a specific process you went through to request the rate review? Last time I was asked the question I was told the website rate was for new customers only. Maybe I just should have pushed harder …
I've only just asked, so who knows whether I'll get it :) I just hit up the chat on their site today, they said to email [email protected] and so I have done so.
We're in a good position financially ATM with my wife having started working part time again recently (refinance was on my income alone last time), so not going to have any problems at all refinancing if they don't oblige though.
@ely: I'm in a similar position. ~2 years buffer in the offset, strong equity, wife and I both earning more than when we took the loan. Should be very easy to refi. I'll try it on. Thanks!
@bthaddad: Go for it! Let me know how you go, I'll post back here too.
Key things I covered (as paraphrased above)
- we're aware that the rate you're giving me is worse than the rate you're offering new customers
- we're aware that the RBA has now cut rates further and that there will be even more competitive offers on the market
- there are others in the market that are beating you (on rate and on cashback)
- we're in a strong financial position and will not have a problem refinancing if we choose to do so
@ely: Tic:Toc contacted me and confirmed that they would give me the extra 5pm reduction to 2.79% that I asked for, and that any cuts coming from the RBA decision (not yet decided, apparently to be decided on Friday) would be on top of that.
@ely: Thanks ely, I was waiting for their rate cut announcement but now I think I'll get in touch sooner. Awesome!
@bthaddad: With the 25bp cut coming it will be 2.54%, so narrowly beating out Athena. Another rate cut is expected next month, and if the coronavirus concerns are still running high then there will be a lot of pressure for the cuts to be passed along in full again (incredible that so many did this time, unlikely to happen again I think).
Give them a call and ask for a rate review. If they don't drop it to the new customer rate then refinance. Plenty of cashback offers available.
They reduced mine when I did this. But they didn't match the new customer rate so i refinanced.
Is the rate review done immediately (i.e. during phone call) and did you call TicToc or the Adelaide Bank line dedicated for TicToc customers? Thx
I called the tic toc line and selected the post settlement option. Review takes about a week before they get back to you. They will give you a spiel about rate is for new customers only. Ignore that and tell them you want a rate review. Tell them better rates with other lenders available.
Within 30mins of RBA Rate Cut, Athena presents a full 0.25 rate cut for New and Current customers: 2.84% to 2.59%
Features (Taken from icedtea229 POST)
No Athena fees: No application or valuation fees, no annual or monthly fees, no exit fees.
Automatic Rate-Match: New and existing customers will always get the same rate on a like-for-like loan.
Fee-free Redraw: Athena reduces the amount of your home loan balance by 100% of the amount in your Redraw.
Loyalty bonus: We’ll reward you with a 0.01% discount on your rate for each of the first 5 years just for making your repayments.Damn that's quick
Yipee!!
Now I just need to get another job to continue affording my mortgage repayments
Athena seem really good in general. I just really wish they had that offset account, otherwise feels like some of my money is just sitting there doing nothing.
Just put all your money into the loan. Free redraw if you need it. Effectively the same thing.
Unless you want to use it as an investment property at a later date….
Nope, nowhere near the same. Redraw has huge tax repercussions if you don't understand how it works. Bank can call it in at any time aswell. Offset much more beneficial.
Are you able to elaborate more on the tax repercussions? Keen to understand this better. I've often been told that redraw is effectively the same thing as offset, until one wants to convert it into an investment property.
@dynamite: For example:
Say you have a $500k PPOR loan (Principle place of residence i.e. your house) and you have a redraw facility with $40k available.
What this basically means is that you have paid the bank $40k extra instead of your regular repayments. The money in a redraw belongs to the bank, and therefore the bank can call it in at any time. If the bank needs urgent funds they can simply take your $40k and you cannot access it anymore (it will also lower your total amount to $460k).
Also, if you were to take out that $40k or any part of it, you are creating a new loan. Not a big deal for PPOR loans, but if you want to debt recycle or if its an investment loan then lots of tax repercussions.If you however had an offset account, that money belongs to you, you are simply parking it into your loan to lower your interest repayments. The bank cant call it in (unless they go bankrupt lol but then they would still owe you that money). And there are heaps of benefits for investment, the main one being non cross collateralisation of your debts for the reasons above.
@dynamite: Just to clarify the tax issue. I have worked for the ATO and Big4 accounting firms and am a tax lawyer (and a broker).
The tax implications of an offset account vs redraw:
Under redraw, you may be denied a tax deduction even if the redraw is from an investment loan, if you redraw funds for a private purpose, eg car, holiday etc. This may cause a problem for current investment loans, and also if your owner occ turns into investment one day - which happens more regularly than people think, unless you know 100% you will never change addresses until the day you die. Under offset, you do not have this issue.
Example from ATO:
https://community.ato.gov.au/t5/Investment-property/Redraw-f…"Generally, you are entitled to deduct interest charged on an investment loan where the whole of the moneys advanced to you has been spent for investment purposes such as buying a rental property, or a home purchased with borrowed money that has been turned into a rental property. However, if you redraw from that loan, then the redraw is treated as a separate loan to you. If you spend the redraw money in a different way to the originally investment related borrowed money then you will have to apportion the interest charged on the loan into deductible and non- deductible parts. The details in this approach are explained at TR 2000/2. You can find an example from the ruling whcih explains how the ATO treats redraw situations. "
Example from ATO Tax Ruling TR 2000/2
https://www.ato.gov.au/law/view/document?docid=TXR/TR20002/N…Full ATO Tax Ruling TR 2000/2
https://www.ato.gov.au/law/view/document?docid=TXR/TR20002/N…@Len -Bundle Loans: Thanks for this reply. I think I've been using my redraw as if it were an offset. It's currently owner occupied and it is my PPOR. Any extra cash I have, I just dump it into my loan account. And when it comes to making monthly contributions, I have a recurring transfer that moves the money from the loan account to the day-to-day account one day before the deduction. The following day, the deduction is made; funds are moved from the day-to-day account and into the loan account. Am I doing it wrong? I also do intend to make my current PPOR into an investment property one day. Should I refinance and get a loan with offset account before then?
P.S. the links you posted are broken
I also do intend to make my current PPOR into an investment property one day. Should I refinance and get a loan with offset account before then?
https://financedetective.com.au/redraw-vs-offset/
"If you redraw money for non-investment purposes then the interest expended on that amount is no longer tax deductable in the eyes of the ATO."
@ShortyX: Even for an owner occupied home loan that is my PPOR? Doesn't seem logical; the information there seems to apply only for investment properties..?
@dynamite: Interest on an OO PPOR isn't deductible (obviously) - the issues can come later if the property turns into an IP.
@ShortyX: Yes, I get that. Which is why the second part of my statement was,
Should I refinance and get a loan with offset account before then?
"then" meaning the day I move out and make it an investment property. Or is it too late and the damage has been done?
@dynamite: Sorry copy pasted from post above. Working links
Example from ATO:
https://community.ato.gov.au/t5/Investment-property/Redraw-f…
Example from ATO Tax Ruling TR 2000/2
https://www.ato.gov.au/law/view/document?docid=TXR/TR20002/N…
Full ATO Tax Ruling TR 2000/2
https://www.ato.gov.au/law/view/document?docid=TXR/TR20002/N…
Can you elaborate on the bank calling it in at any time?
Has this happened before? Why would a bank do this?
@antonthenet: If the market tanks and the bank needs liquidity. Has happened plenty of times all over the world, the 2008 financial crisis would be the most famous in recent times. Check this site out for how many banks have collapsed recently : https://www.fdic.gov/bank/historical/bank/
@croseks: Not to be too alarmed but good point from Croseks
We could face another GFC due to Coronavirus spreading across the world. If so, many lenders may fail, especially a small online non bank lender not backed up or bailed out by the government (link about 558 banks failed in a 20year period). In some cases, the lender would recall the your loan and you will be forced to repay the loan or refinance, which may be hard if you lose your job/made redundant in a GFC. This is unlikely but not impossible.
I have an Athena home loan with a few hundred k extra cash paid into it, reducing the interest
Is there anything stopping me from taking this out and using it as a deposit / part payment to buy another property, in practice?
Can't I just withdraw the money to another account with my usual bank and show that as evidence when getting the second mortgage?
@y: Nothing stopping you taking it out, it's yours as long as it's available.
Just be mindful that it will be considered a brand new loan (as you are re-borrowing that money from the bank) Assuming its a Redraw correct?
If you just withdraw it into any old bank account, and then later use it for a deposit it might not be fully deductable. If you were to buy an investment property and apply for a new loan with Athena, i'm sure they would recognise it and allow you to use it as a deposit, however another lender would probably consider that money to not belong to you and it would just be equity. You should really speak to your accountant about this as there are lots of things here to consider.
@croseks: I feel like this is a very silly question but will ask anyway. If I pay out the loan and then later decide to convert my PPOR into an investment property, will the earlier redraws from my now-closed loan have any tax impact?
@soan papdi: Short answer, probably not.
If you have no loan on an IP, you can't claim any interest expenses anyway, but of course the situation could be more complex then that so speak to your accountant about your situation.
@croseks: Can you elaborate on the "apply for a new loan with Athena"?
Is it because the redraw amount belongs to Athena?@BuyNow Think Later: Redraw = new loan.
Any amount you have in a redraw facility is just extra repayments that you have made into your loan, but it is not your money, its the banks money. So everytime you take out a redraw you are taking out a new loan. Think of it like a Line of Credit.Here's a basic overview: https://futureassist.com.au/offset-vs-redraw/
Reduce are fine too. Just relax.
Reduce Home Loans progress … owner occupied, $400K, 40% LVR, two full-time permanent incomes.
Dec 2016 – sign-up at advertised rate of 3.35%
June 2018 – increase from 3.35% to 3.50%
June 2019 – decrease from 3.50% to 3.25%
July 2019 – decrease from 3.25% to 3.05%
Nov 2019 – decrease from 3.05% to 2.90%
Dec 2019 – decrease from 2.90% to 2.79% (after rate review)
Can't see if they have a minimum loan amount