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Why can’t I redraw my old home loan ( and now an investment property) to make it more deductible and use the extra funds to pay off my new home loan?

April 26, 2017deductible extra funds home loan Investment Property redraw

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Why can’t I redraw my old home loan ( and now an investment property) to make it more deductible and use the extra funds to pay off my new home loan?

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A. The loan that is redrawn, if used to pay off a non deductible home loan is not deductible even if the net effect is that the deductible loan is higher. This is because it is what the loan is used for that makes it deductible.