I was living in my owner occupied home and opted to purchase a new home to live in. However in order to purchse the new home I used $150,000 from the redraw facility on my loan. I then moved into the new property and rented out the existing property.
The rental property now has a loan amount of $325,000 however prior to the redraw monies being taken out (when owner occupied) the loan amount was $175,000. Does this now mean that the tax deductable interest for the rental property is only on the $175,000 amount of the loan? Is so does that mean I can seperate the two amounts from the loan and consider them different in regards to investment and home to live in interest rates. I feel it is going to be some what confusing at tax time.
E.g - $175,000 investment home loan rates and $150,000 owner occupied interest rates. Or is it possible to move the $150,000 over to my current mortgage of teh preoperty I now live in?