Offset account and interest

Hello all,
Long time follower, first time poster.

I am sure the question has been covered, however do not seem to find the answer that i am looking for, so pardon me. The scenario is as follows:

Loan type: variable I/O with offset(s)
purpose: refinance of investment
Loan amount: $350000 [$300000 to refinance, and $50000 in offset]

If i were to take $20000 from the offset account for personal use:
1- do I have to apportion the interest payable?
2- can i put the $20000 back into the offset account and not affect my deductible interest?
3- should i accept the offer for multiple offsets?

Thank you all

 

1. yes
2. no
3. no. don't use an offset like this, but use a LOC with the offset against the main loan.

 

Tax Tip 1: Parking borrowed money in an offset account Tax Tip 1: Parking borrowed money in an offset account

and

Terryw’s Ideal Loan Structure Terryw’s Ideal Loan Structure

 

2. Will that result in a mixed purpose loan then?

 

sure will. Any deposit into the offset account will result in a mixed loan. Even with no deposits you still run the risk of causing a mixed loan.

 

so my interim solution could be to have a 2nd offset account where i can put my own savings (plus salary) and not touch the borrowed money except for investment (and be very careful not to mix the accounts?) Thank you

 

Best to avoid if you can, or do this and then pay back into the loan and redraw before use.

Don't forget to split the loan.

 

Much appreciated Terry,

Regards