If you have a separate split of say $50k and then pay this into a savings account which also contains $50k so the savings account now has $100,000 and if you subsequently use $50k to invest then you may be able to claim 50% of the interest on the $50k - you could argue you can trace the money to the loan, but it was diluted with the cash.
But if you just paid $50k back into loan and then paid $50k from the loan, via a bank cheque maybe, then you can trace the $50k directly to borrowings so you should be able to claim all the interest on this $50k. Even though it was mixed originally you paid off this mixed loan and started again with a clean loan.
@Terry, thank you very much for all your response and wisdom on this topic, your work on these forums are truly appreciated. Next time I come to Sydney I will need to buy you a scotch (on the rocks of course, not mixed with anything