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Yes Rob, that's correct. As I stated as long as the offset money comes from private funds and not loans proceeds all is good. When I was reading through all (not yours secifically) the posts I could just see it becoming confusing to some.

Not wishing to cause any conflict but to ensure Barry has a better understanding of his situation I'd just like to clarify the above. There seems to be some conflicting beliefs/misunderstandings/ideas/suggestions in answers supplied. If Barry borrows $400k and deposits $50k out of his own...

Just because the client has the funds doesn't mean he/she has to use them. As long as the extra $50k goes towards settlement and not into the offset from the loan I believe this should be OK. As always it's best to speak with your accountant.

Out of interest Michael, Would you mind pointing me to the relivant section of the ATO ruling that states a client can redraw funds for personal purposes (different purpose to the acquisition or improvement of the dwelling), the change PPOR to an IP and claim the full debt? Regards Steve

correct but no DEF to refinance later on. The MISA can be a pain depending on how you want to use it. I agree that ANZ's looks better on the surface but they will only lend 90% (won't cap LMI) which could be restrictive depending on your future objectives. In saying this who knows what LVRs...