Hi Somersoft Forums Can you please help me understand if the following scenario allows the interest to be claimed on the loan. We had a PPoR that was split into two loans as follows. PPoR loan 1: ($82k) PPoR loan 2: ($200k) PPoR loan 1 had a redraw account, that we were unknowingly using it for person use for years until recently we got an offset account and started to use that for all income and expenses. This year we did a revaluation on the property and the bank agreed to release $133k from the PPoR for an IP we were going to purchase. The way that the bank gave us access to the equity was by depositing $82k into loan 1, which brought the balance to $0. Then taking out the ($131k) from the same loan, and depositing the difference into our Streamline account to be used for deposit. I ended up using money from my Offset account for the deposit, so I transferred the $49k back to the redraw. (see attachment of the screen shot of loan 1). So essentially this brought the loan balance back to what it was before. My question is the following, because the purpose of the new loan is for an IP, does this allow me to claim all the interest expenses on this loan now? Is this what is called recycling debt?