Hi all Can someone please explain to me how this works as I can't quite wrap my head around it. As background: Current PPOR on an IO loan of $240,000 ($270K purchase) In the last 3 years, let's just say this property has increased in value by $100,000 I now want to use the $100,000 equity to go towards the deposit of my next PPOR so loan becomes $340,000 I then turn the current PPOR into an IP, and collect say $300 rent per week. Monthly repayment becomes ~$1800 per month, the property is now negative ~$600 per month (more with rates etc). I believe the additional $100K is non-deductible so my question is, on the $600 per month, how much of this is deductible? Is it just the % split, so 70%?