Debt Recycling for investment property

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(Newbie)Newbie

11 Feb 2022

Hello,

I am looking to see if I can get some clarification about the deductible portion of a PPOR mortgage if I was to split a portion out for use as a deposit on an investment property.

For example, if I have a $500k mortgage on my PPOR, and refinance at $600k including a new $100k split loan portion to release equity to be entirely used as a deposit on an investment property (eg $400k purchase with loan for $300k).

Would the interest on the $100k split secured against the PPOR and the interest on the $300k investment loan both be deductible?

Or does using the $100k as a loan deposit constitute personal use instead of investment use of funds?

Thanks is advance.

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