Principal and interest

Principal and interest loans are designed for the loan to be fully paid off at the end of the loan period. The repayments consists of both principal and interest repayments reducing the principal amount. The majority of residential properties are principal and interest loans.

Interest only

Interest only loans only pay of the interest portion of the loan. At the end of the loan period the amount owing is still the amount borrowed. Interest only loans are generally suitable to investors to maximize tax-deductible interest and have funds available for further investment properties.