Thanks for the replies Terry and Catalyst.

The purposes of splitting the loan would be to:

1. Simplify the process of determining what interest charges are tax deductible

2. Enable income to be directed to pay down the P&I on the PPOR only, while keeping the part of the loan for income producing assets as Interest-only repayments, since this interest would be tax deductible.

I would like to have this structure established from the start of the loan. Do lenders allow loans for a single property (with multiple dwellings)  to be structured like this?

I appreciate that the split would need to be proportioned to reflect the true ratio of income producing assets to non-income producing assets. I would not be looking to gain any tax advantage be over representing the income producing portion. 

If the loan was 80% of the total property value, would i need to also have each split representing 80% of the income producing assets and 80% of the PPOR? or could I have a split equal to 100% of the income producing assets and the remainder of the loan attributed to the PPOR?

Is there a better way to be doing all of this?

Regards

Reddog