Sell IP to fund PPOR upgrade now, or keep slogging it out? $1.4M total debt.

​Hey everyone, looking for a sanity check. My partner and I are feeling asset-rich but cash-poor, and it's hurting our family time.

​The Numbers:

​Income: $5,200 net per fortnight.

​Current PPOR (Apartment): Value ~$750k. Mortgage: $700k.

​Investment Property (House): Value ~$1.6M (Bought for $890k). Mortgage: $700k. Rent: $800/wk.

​Total Debt: $1.4 Million.

​The Problem:

At current interest rates, we are bleeding close to $8,700 a month to the banks, living and bills. The IP is a cash drain. We have young kids and want out of the apartment into a freestanding family home before we get priced out, but we can't save a deposit from our wages.

​The Proposed Move:

​Sell the IP for $1.6M. After clearing the $700k loan, fees, and setting aside ~$162k for CGT, we walk away with ~$718k cash.

​Buy a Family Home. Inject $650k of that cash as a deposit on a $1.35M freestanding house, leaving a new $700k mortgage.

​Rent out the apartment. Fetching ~$650/wk, the rent will heavily offset the apartment's $700k loan, opening up our daily cash flow. Eventually, we’ll sell the apartment tax-free under the main residence exemption to crush the remaining debt.

​The Dilemma:

People are telling us never to sell Sydney land. They suggest switching both loans to Interest-Only for 5 years to improve cashflow or "slog it out."

​But keeping both keeps us legally on the hook for $1.4M in debt and stuck in an apartment for years.

​What should we do? Hold the land at all costs, or take the cash win and prioritise our family's lifestyle today? Cheers.