Hi all, A question for the finance gurus out there. I have a PPOR purchase price 390k Value now would be about 520k Loan outstanding is 217k (original loan was 230k) and is P&I Balance in redraw 125k Partners savings 100k Combined salaries 210k I realise now I should have got interest only, an offset and also should have used less equity in the initial purchase. Anyway, want to do 2 things in near future. A) Buy an IP (let's say 600k + 40k costs) in Brisbane soon B) in 3-4 years Buy new PPOR in Sydney when market has cooled a little and rent out existing PPoR Here are my proposed actions for (A) 1) Convert current PPoR loan to IO, just for best practice's sake 2) Borrow against equity in current PPoR (say 200k ie 80% of 520 less 217) 3) use 200k borrowed funds as deposit and costs against New IP. I realise this will be higher than 20% 4) Borrow remaining 400k in separate loan against IP Now up until here I am fine. The question is that I know I want to do (B) in 3-4 years However since I have paid additional into the re-draw, have I negated the ability to claim interest on the $125k part of the original loan that is in the re-draw when that property switches to IP? Is there any way to 'refresh' the debt on the current PPOR so that if I do change it to IP in the future there will be more deductible debt on the current PPoR? Or is, as I suspect may be the case, the future tax deduction limited to the current balance on the current home loan i.e. 92k. Any thoughts on an effective strategy here and way forward? If the end game is that it is no longer feasible tax-wise to rent out the current PPoR when purchasing a new one is the best thing to do to refinance by: (a) Pay down the home loan to say $122k (leave $30k buffer over current remaining balance). (b) $300k separate loan for deposits on IP (or maybe two IP) to make roughly the $420k equity accessed in the PPoR to get back to 80% LVR. This would be deductible (c) Third loan for remaining valuation on IP(s). This would be deductible debt. (d) When it comes around to upgrading PPoR, sell the current PPoR (rather than rent out current PPoR with low deductible debt) and use proceeds towards new PPoR with a loan (and offset this time!) Any thoughts most appreciated!