I can't believe we're still debating this.
IO is the way to go. Offset account is crucial. P and I is only if the bank forces you, no other reason.
It is NOT horses for courses. There is no other way.
Agree for the average investor but not always the case.
I have just taken a loan in a unit trust. There are 3 unit holders (all related). We have taken a 20 year term so we can get our exposure under 50% ASAP. If mine only I would keep I0 but because it is a one off and we all have a guarantee there we want to limit our exposure to the property (and each other).
Another scenario is would be someone with a buy sell strategy and no PPOR debt. If they are selling in 12 months who cares if it is offset or in the loan.
Then there is someone who is 60 and very high income. They might have 10 properties, minimal debt and 500k of super a couple of years away. In five years they might plan to retire sell 5 properties and live on the rent of the other 5. Offset might have no real benefit - or might not be important to the client.
Maybe these are not your average scenarios but if I had a broker that had determined my loan structure before understanding what my position and goals were; I'd boot him out the door...
There are hundreds of scenarios IO might not be wanted.
The young investor looking to grow their portfilo, have flexibly to reallocate funds, avoid debt contamination etc etc - YES - IO and offset is usually best however it's crazy to assume it is best for everyone regardless of their age, their goals and their personal circumstances.
Personally i'm not fazed by PI or IO because I wouldn't notice $100 per month. More interested in the bigger picture.