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1.99% discount variable p.a.+
2.71% comparison rate p.a.*

Estimated Repayment# $1,403.70 / month

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Rate City 2021 Gold Award Variable Home Loan 2021 Mozo Experts Choice Low Cost Home Loan Award

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.

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Talk to a home loan expert

Book a time that suits you to chat with a lending specialist to take care of the paperwork for you.

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Ready to apply?

Call us on 13 10 90, or simply start your home loan application application online.

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.

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Our owner occupied interest-only rates

Product name

LVR

Up to 80%

Interest only rate p.a.

3.04%

3.06% comp rate*

Product name

LVR

Up to 80%

Interest only rate p.a.

4.64%

2.99% comp rate*

Product name

LVR

Up to 80%

Interest only rate p.a.

5.44%

3.23% comp rate*

Product name

LVR

Up to 80%

Interest only rate p.a.

5.69%

3.46% comp rate*

Our investor interest-only rates

LVR

Up to 80%

Interest only rate p.a.

2.24%

2.96% comp rate*

Product name

LVR

Up to 80%

Interest only rate p.a.

3.24%

3.26% comp rate*

Product name

LVR

Up to 80%

Interest only rate p.a.

4.44%

3.26% comp rate*

Product name

LVR

Up to 80%

Interest only rate p.a.

5.24%

3.46% comp rate*

Product name

LVR

Up to 80%

Interest only rate p.a.

5.49%

3.65% comp rate*

Find your next home loan

For 10 years, we've been helping Aussies into their dream homes and saving them thousands. Find the right loan for you today so you can start saving too.

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.

Save some extra cash or renovate your property with lower repayments during the interest-only period of your home loan.

Choose a 1-5 year duration of the interest-only period to best suit you.

SClaim higher tax deductions with an interest-only loan as an investor, and use the extra cashflow to renovate your property.

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.

Read some of our real good feedback.

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| 392 reviews

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April 28, 2022

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April 25, 2022

Frequently Asked Questions

A loan can be on interest only repayments for a period of 1-5 years.

Yes, you can make additional payments on an interest-only loan. If the interest-only loan is on a variable interest rate, you can make unlimited additional repayments. If the interest-only loan is on a fixed rate, you can make additional repayments of up to $10,000 per fixed year without penalty.

The main thing to consider with an interest-only home loan is if it is really best for your financial situation. While interest-only home loans are a great option for investors and home-owners alike, they are typically better suited for investors for tax purposes. At the end of your interest only period, you will need to start paying back the principal as well as the interest on your loan, and you can expect your principal and interest repayments to be higher as you are paying back the principal over a shorter amount of time (ie. 25 years vs 30 years)

You can compare our interest only home loan options here.

How to apply for an interest-only home loan

At loans.com.au, we make applying for an interest only home loan simple so you can purchase your new property sooner. Here’s how.

Apply online

Fill out our application online for one of our interest-only loans, or talk to one of our Australian-based lending specialists to do the hard work for you.

Goodbye paperwork

Login to onTrack and upload documents at ease. Receive your documents from us and track your application to approval.

Settle and save

We do everything required for the loan settlement, so you can start saving money.

Variable rate home loan

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.

Variable rate home loan

Thinking of refinancing your interest-only loan? Learn more about it here.

Variable rate home loan

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?

Variable rate 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.

Variable rate home loan

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.

Variable rate home loan

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.

Variable rate home loan

For most people, their home loan is their biggest debt and for that reason, there is a strong urge to pay it off faster.

Variable rate home loan

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.