Interest Only Home Loan Repayments

How to apply
Interest only expiry
Investor benefits
Extra savings
FAQs

Need a cash flow boost?

An interest only term over the life of your loan could come in handy if changes in personal circumstances and finances mean you need access to cash to:

Pay for property repairs or upgrades

Assist with reduced income or debts

Cope with unexpected personal events

Claim potential investor tax benefits*

Apply for interest only repayments

Already have a St.George home loan or looking for a new mortgage?
You can apply for interest only repayments on variable or fixed rate loans for both existing and new home loans:

Owner-occupied loan

Interest only is available for up to 5 years over the life of the loan.

Investment loan

Interest only is available for up to 10 years over the life of the loan.

Apply for a new loan, or if you already have a loan, give us a call on 1300 304 660, 8am-8pm Mon-Fri and 9am-6pm Sat.

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Interest only term expiring soon?

Once your interest only repayment term expires, you'll have three options:

Switch repayment types

Do nothing, and you'll automatically switch to principal and interest repayments.

Extend for another term

Request an extension if you haven't reached the interest only repayment time limit.

Apply for a new loan

Call to discuss your options if you've reached the maximum allowable on interest only.

For an extension or to discuss a new loan, call us 8am-8pm Mon-Fri and 9am-6pm Sat.

Call 1300 304 660 Call 1300 304 660

Benefits for investors

Interest only home loans come into their own when investing in property. You may be able to negatively gear your investment property by offsetting the interest repayments against the rental income and maintenance costs. Investment loans give you up to 10 years on interest only repayments freeing up funds for ongoing property maintenance or buying into additional investment properties.

Extra home loan savings

Set up an offset account

By adding an offset account to your variable home loan, you can reduce the interest payable.

How offset works

Access extra repayments

Reduce your home loan balance by making extra repayments that you can redraw at any time.

Understanding redraw

Make payments more often

Pay off your loan sooner by changing repayments from monthly to weekly or fortnightly.

Repayment calculator

FAQs

Differences between Interest Only and Principal and Interest repayments

With interest only repayments, you’ll only repay the interest portion of the home loan without repaying the loan balance. While with principal and interest repayments, you’ll repay both the interest and the loan balance, meaning you'll pay back your loan sooner.

Understanding home loan repayment types

Can I request interest only repayments on a fixed loan?

Are there any pitfalls with an interest only loan?

They're not necessarily pitfalls but factors you should consider:

Interest rates for loans with interest only repayments are higher
At the end of the interest only term the repayments will be higher than if you’d opted to pay principal and interest from the outset
You’ll pay more interest over the life of the loan
You won’t be building equity in your home as fast.

More on interest only repayments

Can I extend my current interest only term?

It depends on whether you've reached the limit allowable on interest only over the life of the loan. If you've used up the maximum of 5 years on an owner-occupier loan or 10 years on an investor loan, the answer will be no to extending. However, you may be able to apply for a new loan.

To chat about your options, give us a call on 1300 304 660, 8am-8pm Mon-Fri and 9am-6pm Sat.

What happens if I can't afford the repayments at the end of my interest only term?

When you switch from interest only to principal and interest repayments at the end of your term, the increase in repayments can be a shock. If you can’t afford the new repayments, you may need to refinance your loan. Refinancing and applying for a new 30-year loan would lower the principal and interest repayments, but as the loan term has increased, you'll end up paying more interest overall.

To chat about your options, give us a call on 1300 304 660, 8am-8pm Mon-Fri and 9am-6pm Sat.

Why are interest rates higher on interest only loans?

New home loan

Refinance to St.George or apply for a new interest only home loan.

Important information

Conditions, credit criteria, fees and charges apply. Based on St.George’s credit criteria, residential lending is not available for Non-Australian resident borrowers. Interest rates subject to change. Before making a decision, it’s best to read the terms and conditions.

Loan Accounts – Charges for specific services and accounts (PDF 43KB)

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.

Tax consequences may arise from promotions for investors and customers should seek independent advice on any taxation matters.

*The taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation. You must seek independent tax advice to determine taxation implications that are applicable to your personal circumstances.

Interest only home loan repayments