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edit: re-reading the ato docs, the loan expenses like LMI are only deductible as spread over the period of the loan, to a maximum of 5 years. so the worst case is you get no deduction if you dont switch it to IP before 5 years are up. didnt think paying the LMI up front was the only option...

you can only claim interest on the portion of any loan which is used for producing an income. if you somehow get a 500k loan (not sure how you'll manage that?) for which only 350k is for the house, only 70% of the interest is deductible (350/500)...

the rate tracker is only 3 years then it reverts to lite variable, which has no offset? ive been looking at IO ppor with offset loan (now my eyes are opened about tax deductibility of redraw), ruled out commbank due to MISA account sounding like a pain, stg offset reduces loan length rather...

what about this same scenario, but longer term? e.g. have the PPOR loan with redraw for 5-10 years, dump all your money into it, before redrawing all extra repayments to use as deposit for another PPOR, and converting to IP (hopefully changing loan to IO)? does it only matter for tax purposes...