The new loan for the new IP has an offset account. We are both earning approx 50k. The loan interest rate is 8.92 (not factoring in the last rate drop). Can some math guru work out whether its better to be saving money in the offset (reducing the interest somewhat and also reducing the negative gearing by a smaller percentage) or saving into INGdirect (at 7%) but paying tax on interest? For assumptions sake, assume we were planning to save up 20k over the next year. Is it better to do it through the offset or via ING?