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What is the difference between a ‘Principal and Interest’ Home Loan and an Interest-only Home Loan?

April 26, 2017home loan interest-only

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What is the difference between a ‘Principal and Interest’ Home Loan and an Interest-only Home Loan?

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A. A Principal and Interest Home Loan is where the principal repayment and the interest are repaid together throughout a loan’s term. Whereas an ‘interest only’ loan allows you to pay only the interest on the loan for a certain period of time. If you live in your home, you can have an interest only period of up to 10 years, however if you have an Investment Home Loan, you have up to 15 years to pay interest only, after which you need to pay Principal and Interest for the remainder of the loan.