Hi Scott,
I’m a mortgage broker and I have just purchased my principle place of residence. I decided on I/O with an offset account. I prefer the idea of having my savings acting like the principle repayments, yet not locked away. Like you, I want to build up my savings for my next investment.
I have never had an issue with a lender knocking back an I/O for owner occupied? There are I/O loans on my panel up to 15 years!
Perhaps you need to chat with another broker? Second or third opinions are always handy!
Cheers [biggrin]