This is a bit of a rehash of Tax Tip 3 Mixing loans - Don't do it. https://propertychat.com.au/community/threads/tax-tip-3-mixing-loans-dont-do-it.1517/ Where there is a mixed loan any repayment into that loan must come off all parts of the mixed loan in proportion to those parts. e.g. You have a $500,000 loan out of which you bought 5 properties for $100,000 each. It is one big loan. If you happen to be living in one of those properties the interest on this portion is not deductible. So in this case 1/5 of the loan is private use and 4/5 is investment use. So 80% of the loan is deductible and 20% isn't. If you win $100,000 from lotto you would want to pay this off the portion of the loan that relates to the property you are living in. This interest is not deductible whereas the interest on the investment loans is. But because there is one big loan you cannot choose to pay it off part of the loan. If you deposited the $100,000 into the loan 20% of the $100,000 will come off each of the 5 portions. The result will be the main residence portion reduces by 20% and each of the investment portions will reduce by 20%. This is not ideal as you are not maximising tax deductions. So what you would need to do is to split the loan before paying it off. The ATO accept that a mixed loan can be unmixed. TR 2000/2 paragraph 18 In this case you could split it into 2 portions. $400,000 investment portion and $100,000. Once it is split you would then pay off the $100,000 portion But since you are splitting things anyway you might as well take the opportunity to split all 5 loans into their relevant portions. Do it all at once and get it over and done with as problems will arise in the future and you will be in a bad position legally if there is a default on the loan. All properties will be exposed. There is one exception where part of a mixed portion can be paid off a loan without splitting it. I will cover that next.