At 23 years of age, I never wanted to pay principal when starting out. Although it was accumulation stage and I didn't know what the investment journey held, I didn't know the benefits of just I/O. I just knew that I would rather save $$ than pay down the debt. Later on I understood the benefits of I/O: Keeping tax deductibility Keeping cash in offset to reduce interest repayments Keeping cash available for personal needs / emergency / PPOR purchase So curious, what keeps people hung up on P&I? Is it an education thing - "You don't know what you don't know"? The I/O terms are pivotal and can be detrimental to one's ability to hold he portfolio when going P&I after the I/O term is over. So the shorter the I/O term the higher the risk. INTEREST RATE vs. OPPORTUNITY COST Secondly, I find it's easy to get hung up on the rate one is getting. A "high" rate can matter. However, keeping that aside, while in the accumulation phase, what is the opportunity cost? Two of the purchases for @monalisa and I were done in 2013 April & May; these properties were purchased at rates around 5.77% (secured credit cards against the property contributed to the outlay costs of stamp duty & solicitor fees etc). It allowed exposure to the market while a lot of lenders were offering below 5% at the time. The risk paid off with the Sydney market capital growth and the properties were re-financed once enough equity was gained. So what's the reason when many investors are going for the lowest rate when the opportunity cost means you may miss out on 150k-200k capital growth in the short to mid term? What has helped you move forward with your decision making? OR Are you facing analysis paralysis when moving forward - just because in your mind the rate is too high to move to and the opportunity cost too low?