Thank you for your comments Richard and Terry.
I will try to clean this mess up and get some advice from a good tax adviser.

Thank you very much.

Hi Terry,

I am also in  a similar situation.
I have PPOR worth about $350K and I owe $150K.
I have an offset account but I have transferred much of the amount in offset account to home loan account (I&P), about $100K.
There is almost $120K  redrawable amount.
So, If I want to buy an IP and after 2 years make it PPOR  and make current PPOR an IP,how should I structure?

I am trying to explian what I understand as below. Hope it makes sense.

Should I redraw all redrawable amount from current home loan account ( account to offset account (account A), make the current home loan IO (ac and then buy IP with 20% deposit with a new 80% IO investment loan(ac D) with an offset account(ac C). I will be claiming tax deductaible interest on ac D for 2 years.

 And after 2 years (when I make IP my PPOR and my PPOR an IP), If  I transfer all funds in ac A to ac C , Can I claim the interest on ac B as tax deductible ?

Thank you for any suggestion and advice.