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Whats the difference between a Principal and Interest home loan and an Interest-Only home loan?

April 26, 2017difference home loan interest-only Principal

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Whats the difference between a Principal and Interest home loan and an Interest-Only home loan?

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A. Principal and Interest means you make repayments against both the original amount borrowed (‘Principal’) and the interest that is charged. Interest-Only means that repayments are only paying off the interest and principal i.e. interest only payments do not reduce the balance or “principal” amount of your loan.