i believe I am in the very common situation that I have redraw available in my PPOR mortgage and am looking to invest in shares.
Instead of funding my share purchases with cash, I can redraw money from my mortgage to invest.
Two benefits arise from that:
1. The interest on the redrawn portion of the mortgage because tax deductible as it is used for income producing purposes.
2. The interest rate is lower than any margin loan available in Australia
There is an ATO tax ruling from 2000 (link below), outlining some of the requirements to do this correctly.
Despite the clear benefits, this doesn't seem to be talked about a lot. Am I missing something?
Can anyone share their experience with this?
Thanks in advance