First let me apologise for some incorrect information I have given you. After some further research in to the matter the following scenario applies:
If you re mortgage your original home and use the money for non-income producing assets, then the loan above the original loan is NOT tax deductible. Your original loan is tax deductible, the $150000 remaining balance. So the concept of re mortgaging to the hilt does not apply in this case.
Other alternatives are:
1. If you are married/defacto, depending whose name the title is in, it may be transferred (sold) to the other person as an investment property (mortgage to the limit) and the proceeds used to buy your new home. Stamp duty is payable.
2. If the title is in both names or you are single, then sell the house, buy your new home and then purchase an investment property.
You must do the sums yourself to see what is viable and beneficial to your cirmumstances.
Keep one thing in mind however, always try and minimise your non tax deductible debt.
What would I do? I would sell your current house, buy a new home and wait for a couple of years atleast before getting back in to the property invesment market. Alternatively, sell your house, rent for now and then purchase later on.
