Investment Property Loans › What is an interest only investment loan?

What is an interest only investment loan?

An interest only investment loan lets you pay only the interest for a set period, often up to five years, rather than reducing the principal. It keeps repayments lower during that period and is sometimes used for cash flow or tax reasons.

Written by Ross McFarlane, Licensed Mortgage Broker (Credit Representative 526725). About the author

Why this matters

Interest only is popular with investors who want to keep cash flow and tax deductible debt higher, but it does not reduce what you owe, and repayments jump when the interest only period ends. Whether it suits you depends on your strategy and should be weighed with your accountant, not chosen by default.

The key points

You pay only interest for a set period, often up to five years.
Repayments are lower during that period.
It does not reduce the loan balance.
Discuss the tax angle with your accountant.

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Last reviewed: June 2026

General information only. This page provides general information about home loans and is not financial or credit advice, a quote, or a guarantee, and your personal circumstances have not been considered. Lending policies, interest rates, fees and eligibility vary by lender and change over time. Always confirm your own situation with a licensed mortgage broker or lender before acting. Ross McFarlane (Credit Representative 526725) is an authorised Credit Representative of Australian Associated Advisers Pty Ltd t/a Keylend, Australian Credit Licence 392169.