Learn more about interest only loans
How to use our Interest Only Home Loan Calculator
Our Interest Only Home Loan Calculator helps you understand the monthly repayments for both Interest Only and Principal and Interest options, so you can decide which structure works best for your needs. It is simple and straightforward to use.
Enter the following details to see your estimated monthly repayments for each loan type:
Loan Amount - The total amount you plan to borrow.
Interest Rate - The rate your lender uses to calculate the interest charged on your outstanding loan balance.
Loan Term - The full length of time you have to repay the loan.
Interest Only Period - The period where your repayments cover interest charges only. Once this period ends, you will begin repaying both the remaining interest and the principal.
Monthly Fees - Any regular fees associated with servicing or administering your loan. These may include charges for redraw facilities or prepayment fees. Visit our guide to home loan fees for more information.
FAQs
The main difference is what your repayments cover. Principal and interest repayments reduce both your loan balance and the interest charged, while interest only repayments cover only the interest and does not lower the amount you owe.
Principal and interest repayments can help you pay less interest over the life of your loan, reduce your loan balance from day one, and generally come with lower interest rates compared to interest only loans.
Yes. Since interest only repayments do not reduce the principal, borrowers generally pay more interest over the life of the loan compared to principal and interest repayments.
Interest only periods are available for a limited time. Lenders typically offer interest only repayments for an agreed period before the loan reverts to principal and interest. At loans.com.au, we offer an interest only period of 5 years.
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Kathryn
Lending Specialist
Real people, based in Brisbane, Australia
Our experienced home lending specialists are here to help. Let's chat about your home loan options today.