Converting PPOR loan to P&I, what to do with offset?

I'm thinking of converting my PPOR loan to P&I. My other loans are IO.

My current set up is:
PPOR: 500K IO loan with 150k offset
IP1: 350K IO loan with 15k offset
IP2: 450K IO loan, fixed rate

Would it be better for me to convert the PPOR loan to P&I and keep the offset in place, or to move the 150k offset to offset against IP2?

The plan is to pay off the PPOR as soon as possible so that once that's done, we can focus on paying the IP loans down. Cashflow is also a consideration, we can't afford to have all our loans P&I at once so we may have to keep the IP loans IO for a while (whether the banks will allow that is another question!)

Are there any other options that I should consider?

 

Keep the offset account in place. It reduces the interest on your PPOR (which probably isn't tax deductible). By having the offset account in place with that kind of balance, you'll own your PPOR a lot faster.

If you put the money into an offset account against a tax deductible investment loan, you'll pay less interest on that loan and thus have access to less tax deductions.

 

Keep it on the main residence loan and move the other $15k across too.

 

If cashflow is a consideration, can split the OO loan into 350k and 150k. Make P&I repayments on the 350k portion and keep IO on the 150k split. There will be a nil repayment on the 150k portion (fully offset).

This allows you to minimise the forced principle repayment. But it does slow the rate at which you pay off your home, as the forced repayment is smaller. I.e. it helps improve your cash flow while going P&I on your remaining loan balance.

 

Why do you have an offset on an IP loan when you still owe on your PPOR?
Marg