Hi all, My bank wants to advance borrowed funds to my offset (says they cant pay vendor direct) In light of all the posts re mixed funds in offsets, I have some concerns. Plan is to have a 105% IP loan structure as follows: -Equity loan for deposit and purchase costs 20-25% secured against PPOR (which is fully owned). Variable rate with full offset. -Remaining 80% as a 3 year fixed rate loan (so no offset), secured against new property. Now the offset account against the equity loan will also be used for all our wages and personal transactions as well as paying any IP related expenses post settlement. So it'll be our one in all transaction account. In light of what I have read on this forum so far, my thinking is as follows: 1- Allow the the bank to advance the borrowed funds into a new/clean offset account. 2- I pay the deposit, and put any surplus back onto loan redraw, thus again clearing the offset. 3- I subsequently start using the offset for the various mixed reasons mentioned above. The question: Will interest on the 105% borrowings remain deductible in this instance? Many thanks in advance for any advice given.