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http://imgur.com/YcVknRO Hi all, Sorry to bring up a dead thread. I'm still a bit confused. Does interest only work similar to the diagram above, i.e upon expiry the full amount of interest is payable again. Or is it permanently reduced? Once the I/O period expires and I had paid down all the...

Thanks for the responses. What happens at the end of an IO loan, do you just begin to pay the principal? No further interest is added? So theoretically if I were to have a IO loan and 100% offset account with the balance the same as the value of the property I would be able to live there...

Hi all, I'm fairly new to property / investing and finance in general. I was wondering theoretically if you had an IO loan with a 100% offset account with the amount of the loan what happens to your repayments. Do repayments go to zero? or Do repayments now contribute to the principal...