# Interest Only Home Loans

Most lenders offer interest only home loans as part of their normal product listing.

Interest only home and investment loans is where you pay the interest repayments only on the loan. Principal and interest repayments are made after the expiry of the interest only period.

- Interest only home and investment loans is where you pay the interest repayments only on the loan. Therefore, your Loan balance does not reduce during the interest only period unless you make extra repayments.
- Comparing interest only vs principal and interest repayments in the following examples: Interest only mortgage at 5% of $300,000 taken over 30 years the repayments are $15,000 annually. The same mortgage with principal and interest repayments is $19,515 per year.
- Most common interest only terms are from 1 to 5 years
- Interest only loans have a higher interest rate than principal and interest only loans.
- Principal and interest repayments will be higher at the end of the interest only period, because these repayments start at the years remaining on the loan. For example if you had a 30 year loan with an interest only repayments for the first 5 years, principal and interest repayments are calculated from 25 years not 30 years.
- Available for home loans , investment loans, construction, SMSF and low doc loans