Hello, I will appreciate your opinion about deductibility of the interest on loan in the following refinance situation. Original investent property value was $200,000, bank loan is $160,000 (80% LVR). Current investement property value (as per bank valuation) is $250,000. If I refinance at 80% LVR the new loan of $200,000 can be used to re-pay the original loan ($160,000) and $40,000 will be left over. My questions: a) Will the interest on the new loan be deductible if the $40,000 are used for lifestyle (hypothetically)? b) Will $40,000 be considered as the income and be subject to tax or is it a capitan and therefore is tax free? Thank you.