Are there any issues if I borrow as investment loan but use as PPOR?
Borrow as investment loan will boost the borrowing power although the rate will be higher, and I will lose some owner-occupied benefit. Does anyone care if I live in it? As long as I pay the monthly repayment and don't claim as tax deduction on it.
Housing is especially bad in VIC. Labor hasn’t even gotten close to its targets it set for housing and yet have plunged us into astronomical debt. Labor sure knows how to waste money!
Laughs in WA Labor's record consecutive surplus.
Somehow i don't think it's a Labor thing…
you're going to have a bad time
Some people call it "character building" LOL
If this is what people are doing to get into property Australia is cooked.
They just pay $3k for courses advertised on social media.
The money is made when you sell 1000 people a course for $3k and it is put online and every month you put through 1000 people, think of how much money you make risk free.
They are offering their secret to successful property investment when you should really pay $3k for the secret to a successful education business.
Yes you can but the bank will ask you where you will be living. Typically if you're currently renting then the bank will deduct the rent expense on your serviceability calculation but if you say it's going to be for investment, then your current rent expense will remain in serviceability calc.
And if you live at home.with parents rent free then yeh go for it no downside besides higher IR on IP loan.
So you are asking how to fraudulently borrow more money than the bank wants you to borrow for purposes unfit for your ability to repay your loan ?
Probably shouldn't be asking that on a public forum.
Fraudulent? Is he not paying a higher rate? Live and let live. There's a housing emergency and puritans like you want to prevent folk from cutting corners to put a roof over their heads. Banks make enough profit.
OP - disregard the moral majority. Banks will never know. I bought an IP 5 years ago and moved into it 3 years back and I never changed the loan, so I've just continued to pay it. The rate is a little higher but I only have a small mortgage so never thought to change it.
Tinfoil hat on, "Banks will never know. "
Do you have their ap on your phone?
.
Two questions:
1) Are you able to negative gear
2) If yes, wouldn't you miss out on GCT exemption if you sell it.
I live in the house so no longer negatively gear it as an IP.
If I was to sell it (which I won't), I'll be up for a small proportion of CGT. For example, 10 per cent if I live in it for a further 5 years (2/10 ÷ 50 per cent) and diminishing further over time.
I live in Canberra so being able to write off the stamp duty ($40k at the time) was why I initially leased it out. Other states don't have this option though.
@Lunarboogie: I'm in Canberra too but what's this stamp duty write off not available elsewhere? I thought all purchasing costs for IP were deductible.
@Some Guy: Small world!
In the democratic people's republic of Canberra, we get a 99 year lease when we buy property, which is unique to the ACT. While there are no differences in ownership compared with elsewherein the country, it does mean that when investing in an IP, we are allowed to write off the entire stamp duty (which is not cheap here) as a deduction at tax time because it is considered a leasing cost. It's a canberra perk as old as them hills, so I'm surprised you've not heard of it. It's a standard discussion topic around the water coolers where public servants ply their trade.
@Lunarboogie: Nope did not know that. I have IP in other states. Now looking at purchasing another and this would make the ACT more compelling.
@Some Guy: Indeed, it's a handy perk. Not sure there's value in apartments anymore though. But a lot of upside on housing if you're prepared to play a long game. Good luck.
You can call the bank about one month after settlement and tell them circumstances changed and you are now living there and want the PPOR rate. You just need to provide some bills and proof of address documentation. They won't do another serviceability assessment.
For tax purposes don't rent it out anytime after settlement or it will immediately become assessed as an IP.
I've seen it done before where a person was still working but too old for a home loan but were eligible for an investment loan.
short answer is yes.
long answer is yes, banks don't actually care. banks are obligated to keep a certain % of their loans PPOR vs investment and the prices it accordingly. it doesn't make a difference to them and they can't care less
Your profile says Brisbane. Just be aware you may end up paying a higher rate of stamp duty if your bank settles your loan as an investment loan.
If you're at your limit for your loan and you're trying to increase it against the bank's stopgap measures you're going to have a bad time.
If this is what people are doing to get into property Australia is cooked.