Interest-only repayments
Interest-only repayments cover the interest on a loan rather than reducing its principal, for an agreed period, usually one to five years.
Interest-only repayments, explained.
Investors use interest-only periods to keep repayments low on deductible debt while directing cash to the non-deductible home loan or to an offset. Owner-occupiers sometimes use them through a construction period or a change in income.
Interest-only pricing depends on the lender and loan. When the interest-only period ends, principal and interest repayments over the remaining term can be higher. Lenders assess the ability to meet the repayments that follow.
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The Learn section is general information about lending in Australia. It does not take account of your objectives, financial situation or needs, is not credit assistance, and is not tax, legal or financial advice. Lender policies, government schedules and regulations change; check the current position with the relevant body or with us before relying on it.
