The rule is was the interest incurred in the production of assessable income.
If you take out a loan against your PPOR in order to use as a deposit on an IP, the IP does produce assessable income, so the interest on the loan IS deductible.
Alex
Mixed up, don't get TOO detailed with it. Buy when the bank will lend you the money and based on your own figures you can afford to hold it over the long term.
Alex