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Another argument is that if you set up a separate loan split secured on the PPOR and then are charged LMI for this then all the LMI could be deductible. Seek specific tax advice before attempting any of these.

Yes one argument is that part of the LMI (majority maybe) relates to the non deductible loan hence it must be apportioned.

Deductibility doesn't depend on security of a loan but the purpose and use of the borrowed funds. You should pay the LOC and th IP loan interest with cash - ie from the offset.

Well, generally that is the case. If you never pay down a loan there will be nothing to redraw. Put cash in the offset and this has the same effect as repayment into the loan (as long as you are not tempted to spend). However if you do not have enough equity to buy the next property you may...

An offset is just cash, so taking it out generally has no direct tax consequences. If all the loan on the PPOR relates to the purchase of that property (PPOR) then all the interest would probably be deductible. Doesn't matter what the offset is used for it won't change.

Do you mean withdrawal from the offset? An offset is a savings account. So just cash. You can pay down the PPOR loan and then split it. But if the PPOR ever becomes a rental you will have less to claim.

redraw = new borrowings. If you park into an offset with other money = mixing deductible and non deductible and would not be able to claim the full interest when the money is drawn to invest. hangon - edit here. What do you mean by 'redraw'. I think you may be referring to withdrawal from the...

1. Don't take from the offset as your PPOR interest will increase and you cannot claim this 2. Don't take from redraw as you will creat a mixed purpose loan and a tax mess. 3. If you repay the money into the loan you will have lost access to it and have to reborrow it if you need it...