To be considered, the product and rate must be clearly published on the product provider's web site. Some providers' products may not be available in all states. Rather, a cut-down portion of the market has been considered. The entire market was not considered in selecting the above products. AFSL and Australian Credit License Number 515843.Different terms, fees or other loan amounts might result in a different comparison rate. Warning: this comparison rate is true only for this example and may not include all fees and charges. *The Comparison rate is based on a $150,000 loan over 25 years. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. To work out how much your repayments will be with an interest-only home loan, use an interest-only loan calculator.īase criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. Read here to learn more about the pros and cons of interest-only home loans. The IO loan will cost the borrower $313,400 in total interest, while the P&I option will cost around $287,500 - a difference of nearly $30,000. With a simple P&I loan, the monthly repayments remain constant at $1,910.With a 5-year IO period, monthly repayments would be $1,333 before reverting to $2,111 for the remaining 25 years.They’re particularly attractive to investors, who can tax-deduct the interest repayments.Īs an example of how interest-only loans can be cheaper now, but more expensive later, let’s look at a $400,000 home loan with a 4.00% p.a. Interest-only home loans can be described as “less now, more later” in that your repayments for a few years will be significantly lower, but will be higher than usual once the interest-only period ends. Why switch to an interest-only home loan? This means for a short period of time, you only have to repay the interest component of the home loan, before it reverts to both principal and interest (P&I) repayments. Interest-only (IO) loans are home loans which delay the repayment of the borrowed amount (the ‘principal’) for a fixed term, usually three to five years. You can then compare this to a different home loan, and hopefully find the right loan for you. Input the loan amount and the repayment frequency.Input the loan term (length) and the interest-only term.’s interest-only home loan calculator can allow you to compare interest-only home loans with principal and interest loans, to see how much you could save in the short-term in exchange for greater long-term expenses.Īll you need to do to use to our interest-only home loan calculator is: Interest-only mortgage repayment calculator
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