What is an interest-only home loan?

Most home loan borrowers have a principal and interest (P&I) home loan on their primary place of residence. That means they repay some of the principal of the loan with every repayment.


Many property investors opt for an interest-only home loan. That means they only repay the interest, making repayments lower. The loan principal is unchanged.


Typically the interest-only period is five years. Many lenders will offer to extend for another five years.


Source: The Age