The AIO mortgage seems to make sense for someone whose paychecks vary wildly throughout the year. I still can't figure out how a person with a regular salary position could come out ahead when the interest rate is 30% higher than a variable rate mortgage.
My mortgage gives me the ability to increase my payments up to double and I can make unlimited lump sum payments whenever I want up to a max of 20% per year.
The only advantage I can see is that if gives the ability to park money on your mortgage but that seems like a small advantage compared to a lower interest rate.
As well, if you park the money and never use it then there is no advantage as you could have just prepayed the lower rate mortgage. On the other hand, if you park money and then use it you lose all the future savings and are now paying a higher rate for no gain.
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