Interest-Only Home Loans
An interest-only home loan will leave you only paying interest for the first few years of your loan.
Our home loans
- Discounted home loan rate
- Offset sub-account available for +0.10%^
- 10% deposit minimum
- Discounted solar home loan rate
- Offset sub-account available for +0.10%^
- 10% deposit minimum
- Low rate home loan
- Offset sub-account available for +0.10%^
- 20% deposit minimum
What is an interest-only loan?
An interest-only home loan allows you to only pay the interest on the amount borrowed (known as the principal) for an agreed interest-only period of 1-5 years. At the end of the interest-only period, loan repayments will increase to pay off the interest and principal of the loan.
How does an interest-only loan work?
Interest-only loans are only applied during the first period of your home loan, which can be up to five years. During this period, the loan repayments only consist of the interest on the loan balance (the principal). Therefore, repayments will be lower because you will not be paying off the principal.
After the interest-only period, the loan will revert to a principal and interest (P&I) loan. The loan repayments will include paying the interest and principal, rather than just the interest, resulting in higher repayments.
Get started
Apply for an interest-only home loan online today. Or, one of our friendly lending specialist can do the hard work for you and manage your paperwork over the phone.
Either way, we can settle your loan quickly so you can start saving thousands sooner.
Who is best suited to an interest-only loan?
Interest-only loans can be a great option for for investors, or for home buyers who’d prefer to spend money on making improvements to the property rather than paying off the principal at the beginning of the loan. There may also be tax benefits for investors who choose an interest only loan.
Our owner occupied rates
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Fixed Rate
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Our investor rates
Investor Interest-Only rates
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Fixed Rate
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Benefits of interest-only loans
Keep your repayments low during the start of your mortgage
Save some extra cash or renovate your property with lower repayments during the interest-only period of your home loan.
Choose the interest-only period
Choose a 1-5 year duration of the interest-only period to best suit you.
Investor perks
Claim higher tax deductions with an interest-only loan as an investor, and use the extra cashflow to renovate your property.
Easily switch from an interest-only to principal and interest loan with loans.com.au
As a loans.com.au customer, you won’t need to do anything to switch from an interest-only to principal and interest loan. We will notify you of the change and the new repayment amount and automatically transfer your loan to principal and interest.
Keep your repayments low during the start of your mortgage
Save some extra cash or renovate your property with lower repayments during the interest-only period of your home loan.
Choose the interest-only period
Choose a 1-5 year duration of the interest-only period to best suit you.
Investor perks
SClaim higher tax deductions with an interest-only loan as an investor, and use the extra cashflow to renovate your property.
Easily switch from an interest-only to principal and interest loan with loans.com.au
As a loans.com.au customer, you won’t need to do anything to switch from an interest-only to principal and interest loan. We will notify you of the change and the new repayment amount and automatically transfer your loan to principal and interest.
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Frequently Asked Questions
Our home loan application process
Apply online
Simply fill out your application online by entering some of your details, or chat to one of our friendly lending specialists over the phone and they can complete your application for you.
Goodbye paperwork
After your application is complete, use our system we call onTrack on your desktop or device to add your documentation such as payslips and bank statements, and track the progress of your application.
Settle & save
Your loan will settle and you'll start saving with your new low rate, and get your keys to your new dream home!
Interest-only home loans allow you to only pay the interest on the balance you have borrowed for a specific period. Find out more on how do interest-only loans work.
Thinking of refinancing your interest-only loan? Learn more about it here.
There are a number of strategies you can choose from to repay your home loan debt. The key components of loan repayments are the principal and the interest. Find out more about what is principal & interest home loan?
If you're applying for a home loan, it's important to understand how home loan interest works and how interest is calculated on a mortgage loan. Learn more.
As interest rate has a big impact on your mortgage repayments, it’s crucial to understand the different types of interest rates & how they work.
If you are looking to invest in property, you may need to consider a different type of loan than an owner occupier loan. Here’s a helpful guide to the different options you have as a property investor.
For most people, their home loan is their biggest debt and for that reason, there is a strong urge to pay it off faster.
What's the difference between an owner-occupied home loan vs investment loan? If you're considering taking out an investment loan for a second property, start here.