We have just renovated a place, we are in the process of deciding whether to stay here, or to sell it and buy a unit to rent out and buy a place to live in.

Just wondering if anyone can tell me in laymans terms how negative gearing works??

If we keep this place, we would have to borrow 100% for the place we live in. If we sell, we will have a fair bit of equity to put to either the investment or the place we live in. Not sure which would be better?

TIA!