Hello all, my first post but have lurking for a while. still a bit of a noob when it comes to the finances. Quick question re: the setup of a LOC. Say I have a PPOR worth $500K, home loan outstanding of $100K with a split fixed and variable interest and an offset account. I then take out a LOC for 80% of value. So looks like as follows: PPOR: $500K valuation Home Loan fixed: $50K Home Loan variable: $50K Offset account: $any If I take out a LOC does it completely replace the fixed and variable loans or is it added as a separate loan? For example (1): PPOR: $500K valuation. LOC: $400K elligible (i.e. 80% of $500K) LOC account: $300K ($400K - $100K of the fixed and variable loan) Both the fixed and variable loans are now paid out by the LOC and interest being charged on the $100K of the LOC used to pay out the two home loans. ...or does it just add to the existing accounts less the outstanding home-loan amounts. For example (2): PPOR: $500K valuation. LOC: $400K elligible (i.e. 80% of $500K) Home Loan fixed: $50K Home Loan variable: $50K LOC account: $300K ($400K - $100K made up of the two home loans) No interest charged yet on the LOC as nothing is drawn from the available $300K. Thanks in advance!