Thanks for your reply Terryw,

I did some searching around to better understand what you mean. I grasp the concept of only being able to deduct the interest that would have been payable on the first loan. It seems that I was lucky to go for the 100% offset account from the begining. Am I right in thinking that once I have tenants in, I am able to move the cash in the offset to a high interest account to achieve a profit loss balance (pushing me more negative or positive). I suppose my question more leans towards, should I neutral or positive gear, given that I have some cash to be able to manipulate the cash flow.

The 6 year rule is what I was looking for, thank you for that.