Nick, Can you(or others ) comment on the relative positives and negatives of doing this? Obviously this will be different for various individuals, however I'm sure there are some general comments that might also be useful. Ok.......I'll get the ball rolling....... Why would you want to prepay the interest? For some I would think it may be advantageous to possibly incur some additional tax deductible items in a particular year to offset other income. This may well vary from year to year but may be used as a 'balancing tool'. Prepaying interest usually qualifies for discounted rates, however I guess you have to examine the discount you are receiving against the lost 'opportunity cost' ie. by investing the money up front and having it working for you it may be possible to get an overall better return than the benefit from the discount. Indeed, when you actually look at the interest rate deduction for pre-payment, how much of an incentive is it if the money is actively invested for investments during the period anyway? This is just quickly off the top of my head and I'll have a play around with some actual figures when I get a chance. Any other comments about prepaying the interest? NB. Let's leave Capitalising the interest as a separate question for now.