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Home Calculators Interest-only vs principal and interest calculator

Interest-only vs principal and interest calculator

Lower repayments now, higher ones later: see both, and what it costs over the loan.

Your loan

Your current rate, or a rate you're considering. We don't suggest a rate.

Not sure what rate to enter?
  • If you have a loan, your rate is on your loan statement or in your banking app.
  • If you're buying or refinancing, use a rate a lender has offered you or one you've seen advertised.
  • For reference, the average variable rate on new home loans in August 2026 was about 6.2% for owner-occupiers and 6.4% for investors (Reserve Bank of Australia). Your rate depends on the lender, the loan and your situation. This is a market average, not a rate we're offering.
  • Not sure what rate you'd get? Ask Nabita

Your estimate

Fill in your loan details and press Compare repayments.

How we worked this out

  • Interest is charged each time you repay (monthly, fortnightly or weekly), on the loan balance. This is how Moneysmart's mortgage calculator works; lenders usually charge interest daily, so their figures can differ slightly.
  • The rate stays the same for the whole loan. In real life, rates change.
  • Repayments are the amount that pays off the loan over the term you chose, after the interest-only period. During the interest-only period you pay only the interest, so the balance doesn't go down.
  • Not included: fees and charges, lenders mortgage insurance, and rate changes.

Estimate only. This is an estimate based on the figures you entered and the assumptions shown. It isn't a quote, a loan offer or an approval, and it doesn't take into account your full financial situation. Lenders apply their own policies, and all applications are subject to lender approval.

How MoneyGenie helps

Nabita compares options from MoneyGenie's panel of 35+ lenders, tells you upfront which are realistic for your situation, and handles the application with you through to settlement. Our service is generally at no cost to you, as we're paid a commission by the lender, which we disclose to you upfront. Details are in our Credit Guide, available on request. Talk to Nabita: call 040 110 1608 or send an enquiry.

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Frequently asked questions

What is an interest-only home loan?

For a set period, often up to five years, you repay only the interest, so the amount you owe doesn't go down. After that, the loan switches to principal and interest.

What happens when the interest-only period ends?

Your repayments rise, because you now repay the whole loan over a shorter remaining term. Moneysmart recommends checking that you could afford the higher repayments before you start.

Do interest-only loans cost more?

Usually, yes. You pay interest on the full amount for longer, and interest-only rates can be higher than principal and interest rates.

Figures checked by Nabita, mortgage broker, MoneyGenie Finance.

Official sources

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Talk to Nabita about your result

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