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Buying a second home - turning current home into Investment

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kylestar | 03 Aug 2016, 02:05 PM Agree 0
I have just purchased an apartment and will be renting out my current home.

Can I use the equity on my current home that I will to turn into an investment property to reduce the mortgage on my new home that will be my primary address?

Current home value is $750k with $355,000 in equity. I would like to use the equity to reduce my new mortgage of $800,000.

I suggested this with my mortgage broker who said it was illegal to use the investment property equity to reduce a primary address. However it is not yet an investment property, it is my home.

Thank you, I look forward to hearing your responses.
  • Terryw | 01 Dec 2016, 07:38 PM Agree 0
    Yes you can, but this will not improve deductibility as only the interest on the loan which relates to the purchase of the current property will become deductible once it is available for rent. In short increasing the loan will not increase deductible interest.
  • Terryw | 01 Dec 2016, 07:38 PM Agree 0
    Yes you can, but this will not improve deductibility as only the interest on the loan which relates to the purchase of the current property will become deductible once it is available for rent. In short increasing the loan will not increase deductible interest.
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