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Thanks for the replies guys. So let me get this right, I understand that IO loans improve your cash flow, but that means you are completely relying on capital growth to build equity in order to further invest. That means if capital growth is slow, you're stuffed?

Background: I have been tossing up between buying a PPOR or IP and decided on IP, unless the bargain of the century lands in my lap for a PPOR. I have a reasonable deposit (130) and reasonable income (150). I am likely to move overseas in a few years and don’t want to be burdened with funding...