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In theory, the balance would come down during the month if you pay extra before the interest is taken out wouldn't it? But then you may also start muddying up the waters when it comes to tax time, so you'd want to tread carefully. Thinking about it, I don't think it will save you much interest...

hmmmm there you've got me. I've never really heard of it being used with IO loans. Someone smarter than me with a calculator could probably work out if it's better for you, but I wouldn't think it would make too much of a difference.

In that case yes, the more often you make payments, the more $'s that will come off the principal of the loan if you're paying P&I. It's a strategy many use for their PPOR.

Monthly. Weekly or fortnightly would be an absolute nightmare! :eek: