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A property doesn't have to be unencumbered (in the sense of having no mortgage) for interest to be zero. Don't be too fixated in the SMSF strategies. You have a LOT of years before you hit preservation age, and no one knows what it will be when you get there anyway (my guess: it's going to...

Say you have 5 properties, with 5 loans. Is it better to go P&I on all of them, or IO on all of them and put the 5 lots of P amounts into one of the offsets? Clearly, the second option gives you much more flexibility.

IO with offset. If you're at the stage when you want to reduce interest payments (note that I didn't not say 'if you want to reduce debt'), add the extra cashflow to the offset account(s) instead. Why? Because you never know when you simply can't borrow money anymore (e.g. when you 'retire')...