Savings .com.au

Interest-only mortgage repayment calculator

Savings.com.au’s interest-only home loan calculator allows you to compare interest-only (IO) home loans with principal and interest (P&I) loans, seeing how much more you could pay in the long term despite reduced interest-only repayments in the short term.

To use our interest-only home loan calculator, enter:

  • The loan amount
  • The interest rate of the loan
  • The loan term (number of years of the entire loan) and the interest-only period (in years)
  • Any monthly fees

You can see the extra you will pay in total interest as well as compare repayments for both interest-only and principal and interest loans.

What is an interest-only mortgage?

Interest-only loans are home loans which delay the repayment of the borrowed amount (the ‘principal’) for a fixed term, usually three to five years. This means for a period, generally at the beginning of the loan, the borrowers only repay the interest component of their home loan, before it reverts to repaying both principal and interest.

Why switch to an interest-only home loan?

Interest-only home loans can be described as “less now, more later” as repayments for a few years will be significantly lower but can be considerably higher once the interest-only period ends. They’re particularly attractive to some investors who can buy property while maximising their cash flow and increase the tax-deduction capacity of their loans.

As an example of how interest-only loans can cost less up front but be more expensive later on, let’s look at a $400,000 home loan with a 4.00% p.a. interest rate over 30 years:

  • With a five-year IO period, monthly repayments would be $1,333 before reverting to $2,111 for the remaining 25 years
  • With a simple P&I loan, the monthly repayments remain constant at $1,910

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.

Learn more about the pros and cons of interest-only home loans.


Looking for a home loan?

Buying a home or looking to refinance? The table below features home loans
with some of the lowest interest rates on the market for owner occupiers.

Lender

Variable
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4.6 Star Customer Ratings
  • No monthly or ongoing fees
  • Unlimited free redraw
  • No application fee
4.6 Star Customer Ratings

loans.com.au – Variable Home Loan (LVR < 90%)

  • No monthly or ongoing fees
  • Unlimited free redraw
  • No application fee
Variable
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Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Apply In Minutes

Unloan – Variable Rate Home Loan LVR < 80%

  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
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Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Unlimited Redraws

ubank – Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Variable
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loans.com.au – Solar Home Loan (Principal & Interest) (LVR < 90%)

    Variable
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    • Estimate your borrowing power in as little as 1 minute
    • Complete your application in as little as 15 minutes

    Macquarie Bank – Basic Home Loan (Principal and Interest) (LVR < 60%)

    • Estimate your borrowing power in as little as 1 minute
    • Complete your application in as little as 15 minutes
    Variable
    More details

    ubank – Neat Variable Home Loan (Principal and Interest) (LVR ≤ 80%)

    • Home loan specialists available today
    Variable
    More details
    • Estimate your borrowing power in as little as 1 minute
    • Complete your application in as little as 15 minutes

    Macquarie Bank – Basic Home Loan (Principal and Interest) (LVR 70%-80%)

    • Estimate your borrowing power in as little as 1 minute
    • Complete your application in as little as 15 minutes
    Variable
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    Commonwealth Bank – Wealth Package Variable Home Loan (Principal and Interest) (LVR 70% - 80%)

      Variable
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      NAB – Base Variable Home Loan (Principal and Interest) (New Customer)

        Variable
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        Westpac – Flexi First Option Home Loan (New Customer) (LVR > 80%)

          Variable
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          ANZ – Standard Variable Home Loan (Principal and Interest) (LVR < 80%)

            Variable
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            Heritage Bank – Discount Variable Home Loan ($150k+) (LVR < 70%)

              Variable
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              People's Choice – Package Variable Home Loan (Principal and Interest) (New Customer) ($100k+) (LVR < 70%)

                Variable
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                Bendigo Bank – Express Home Loan (Principal and Interest)

                  Variable
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                  HSBC – Home Value Home Loan (Principal and Interest) (LVR < 70%)

                    Variable
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                    MOVE Bank – Everyday Home Loan (Principal & Interest) LVR < 80%

                      Variable
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                      Suncorp Bank – Personal Purpose Back to Basics Special (Principal and Interest) (LVR ≤ 60%) (New Customer)

                        Variable
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                        ING – Mortgage Simplifier Home Loan (Principal and Interest) ($150k-$500k, LVR < 80%)

                          Variable
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                          Great Southern Bank – Basic Variable Owner Occupier Construction (LVR ≤ 70%)

                            Variable
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                            Macquarie Bank – Basic Home Loan (Principal and Interest) (LVR 60%-70%)

                              Important Information and Comparison Rate Warning

                              Base 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%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 21, 2024. View disclaimer.

                              Important Information and Comparison Rate Warning