Interest Only Home Loans

MortgageBiz has a range of flexible variable rate home loans to suit owner occupiers and investors.

Why choose interest only home loans?

With an interest only loan, just interest gets paid on the loan during the interest only period. That means the monthly payments are less than a standard loan. After the interest only period ends, typically between one and five years later, you have to make repayments on principal and interest for the rest of the loan's term. 

For example, if you take interest only home loan of $500,000 for 3 years on a 30-year loan term then for the first 3 years your repayments will be interest only. For the remaining period of 27 years, your repayment will be principal and interest. 

Pros and cons of an interest-only loan

On an interest-only home loan, your repayments only cover the interest on the amount borrowed. For a set period, you pay nothing off the amount borrowed, so it doesn't reduce.
  • Lower repayments during the interest-only period could help you save more or pay off other more expensive debts.
  • May be useful for short-term loans, such as bridging finance or construction loan. 
  • May be useful for short-term loans, such as If you're an investor, you could claim higher tax deductions from an investment property.
  • The interest rate could be higher than on a principal and interest loan. So you pay more over the life of the loan.
  • You pay nothing off the principal during the interest-only period, so the amount borrowed doesn't reduce.
  • Your repayments will increase after the interest-only period, which may not be affordable.
  • If your property doesn't increase in value during the interest-only period, you won't build up any equity. This can put you at risk if there's a market downturn, or your circumstances change and you want to sell.

Our Loan Process makes finance simple with easy steps. Our experts are a call away from you. 
1. Apply online
Our loan application process is entirely online via our innovative web app.
2. Talk to a lending specialist
Talk to a lending specialist in our Australian-based call center.
3. Goodbye paperwork!
Upload your documents and track your progress in app.
4. Quick pay out
Upload your documents and track your progress in app.
5. Smart Money
Access your new account via Online Services.

Get started

Apply online or speak to one of our Australian based loan specialists who will take care of all the paperwork for you. Applying is easy and we can settle your loan quickly so you start saving sooner. With you can have confidence in dealing with Australia's largest non-bank lender.
How much can I borrow?
It takes less than 3 minutes to calculate your borrowing power!
Ready to apply or want pre-approval?
Give us a call on 1300 740 032 or start an online application.

Need some help?

Our experts will help you search, choose and settle your home loan online. Chat to one of our Home Loan Specialists at a time that suits you.