Thanks for that gents.

Just to add and answer – on my current property i owe about $290k (value $400k) and i have a 100% offset.  I have to date maintained princ and interest + anything extra on this place to build equity, so i could use it for an investment property.  I have no other personal debt which i have recently completed paying off car/tv etc.

I will look at the IO and focus on putting any funds into the offset on my existing property?  The whole tax situation does confuse me a little – but surely i would never be worse off?  I have a heathy and stable wage, so either way i pay a top marginal tax rate (so im screwed either way )

Cheers