Paying principals in I/O loan

@Carlos Ptriawan just to answer your question - yes....as long as the lender allows it.  But just about all of them do.  Some will possibly have a 3 year "prepayment" penalty but that's only if you pay it all the way off.  Just adding more money to the payment is usually ok.

@Joe Villeneuve there are quite a number of lenders right now that are offering 40 year, I/O mortgages that are about 1% less than the market rate of a 30 year, fixed. So in theory, if you are disciplined, you could be a little more effective with that loan product...but you know how that goes.