IO or P&I on investment

There is a 3rd hybrid option that hasnt been mentioned yet and I've been using recently. Keep the loan at IO, fill your offset account to the maximum level and whatever spare cash you have after that goes into paying down the principle. NOTE, most lenders allow you to pay a small amount of the principle off when working in this manner, even if you have a fixed rate. For example CBA are 10k per year, Rams allow 30k over the life of the fixed term etc. You need to fully understand the limitations of your product here as paying more than is allowed can actually cost you in fees but this allows you to manage your cashflows whilst also reducing your principle amount (and your repayment amounts as you pay down some of the loan.