Repayment options

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Principal & Interest (P&I) 

A Principal & Interest home loan is where both the principal and the interest are repaid during the loan term.

This is by far more common than Interest Only loans as it means that your home loan will be paid off at the end of the term.

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Interest only (IO)


An Interest Only home loan is where only the interest is required to be paid for the first few years (usually up to 5 years).  The principal amount is not required to be repaid during the Interest Only period.

Stricter lending criteria apply to Interest Only loans.

Interest Only loans also have higher interest rates than Principal & Interest loans.

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