mortgages
Interest-Only Home Loans
Understand how interest-only repayments work, what happens after the IO period ends, and how to estimate repayments.
Updated Jan 2026
Interest-Only Home Loans (Australia)
With interest-only (IO), you pay interest for a set period — and the principal doesn’t reduce during that time.
The key risk: repayment shock
When the IO period ends, your remaining principal must be repaid over a shorter time — repayments can jump sharply.
Model it in MoneyWiseCalc
- Tool: Home Loan Repayment Calculator
- Set repayment type: "Interest-only"
- Enter IO period if available in your config
Tip: Compare IO vs P&I side-by-side using scenarios.