I have an interest only investment loan of $90K with the funds having been used to put into a margin loan to buy income producing shares. I claim tax deduction for the interest on this loan (approx $400/month). I pay $400/month into the investment loan each month so that the loan remains at $90K. The $400/month paid into the investment loan comes from the redraw facility on my home loan. The $400/month is effectively new borrowings. My question is, can I claim a tax deduction for the interest charged on the new borrowings of $400/month in my home loan account. I'm thinking yes, because if the $400/month was capitalised on the investment loan then I would be able to claim the compound interest. Hoping someone can help. Cheers.