How would an interest-only home loan benefit you if you are only servicing the interest and not paying off the principal?
Your goals and objectives will decide this. There are a few reasons why only using interest is a good idea.
The goal of the investment - To maximize their tax benefit, investors often want their loans to be interest-only (tax-deductible interest).
Boost your cash flow - Because you are simply paying interest, your monthly payments will be cheaper than if you were paying principal and interest.
Other possibilities for investment - Lower repayments mean more money in the bank, which investors can put toward other investments.
Paying off non-deductible debt - Some debtors have a loan that they want to pay off first because they own their home. Borrowers who take out interest-only loans will have more cash flow, allowing them to use it to pay down their owner-occupied loan first.If you're considering an interest-only loan for whatever reason, make sure you get professional guidance first.