Interest-Only Loans Australia
Pay only interest on your loan for a set period, saving up cash and allowing you to redirect funds to other expenses and investments.
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Get Interest-Only Home Loans in Australia
Australia has a strong market for interest-only mortgages, with many lenders offering competitive rates and terms. Dark Horse Financial has a wide network of lenders, allowing us to match you with the best one that can meet your needs.
What Is an Interest-Only Loan in Australia?
An interest-only loan allows you to pay only the interest portion of your mortgage for a set period (typically 1-5 years). During this time, you won’t reduce the principal balance, keeping repayments lower. After the interest-only period ends, the loan reverts to principal-and-interest repayments.
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Benefits of an Interest-Only Home Loan
✔ Lower initial repayments – Free up cash for other investments or expenses.
✔ Tax advantages – Interest payments may be tax-deductible for interest-only investment loans.
✔ Flexibility – Ideal for short-term property strategies or cash flow management.
✔ Investment growth – Redirect savings into higher-yield opportunities.
Who Should Consider an Interest-Only Loan?
- Property investors looking to minimise holding costs.
- Homeowners expecting future income growth (e.g., career progression).
- Borrowers with irregular income (e.g., self-employed or commission-based).
- Renovators or developers needing short-term financing.
We’re Experts In Interest-Only Loans in Australia
At Dark Horse Financial, we specialise in helping Australian borrowers secure interest-only home loans tailored to their financial goals. Whether you’re an investor looking to maximise cash flow or a homeowner seeking lower initial repayments, our expert brokers can find the right interest-only loan for your needs. Here’s why we’re trusted all over the country:
- Lending Expertise: We have 10 years of loan expertise, dealing with both home buyers and investors. We’ll help you find a lending solution that meets your needs.
- Network of Lenders: We’ve cultivated a large network of lenders, meaning we can match you with the right one that can meet your borrowing needs and timeline.
- Customised Terms: We tailor all loan solutions to your situation and goals.
- Best Rates: We negotiate on your behalf so you can access the best interest rates based on your situation.
- Ongoing Support: Our services continue even after loan settlement. Once you partner with us, we’re with you for years to come.
How to Apply for Interest-Only Loans
- Complete the Form: Fill out our short online form. We’ll get back to you as soon as we can to discuss your interest-only mortgage needs.
- Submit Your Application: After we talk you through what’s needed, we’ll submit your application on your behalf.
- Assessment and Approval: The lender will assess your application. We’ll ensure you can get a response within your required time frame.
- Receive Funds: Once the loan is approved, read through the loan agreement and sign if you agree to the terms. The funds will then be disbursed, allowing you to purchase or refinance your property.
Ready to explore your options? Contact Dark Horse Financial today for expert advice on interest-only loans Australia-wide.
How to Apply for Interest-Only Loans
- Complete the Form: Fill out our short online form. We’ll get back to you as soon as we can to discuss your interest-only mortgage needs.
- Submit Your Application: After we talk you through what’s needed, we’ll submit your application on your behalf.
- Assessment and Approval: The lender will assess your application. We’ll ensure you can get a response within your required time frame.
- Receive Funds: Once the loan is approved, read through the loan agreement and sign if you agree to the terms. The funds will then be disbursed, allowing you to purchase or refinance your property.
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Interest-Only Loans FAQs
An interest-only loan is a mortgage where you only pay the interest for a set period, keeping repayments lower before switching to principal-and-interest.
According to APRA, interest-only loans made up 11.3% of total outstanding residential mortgages, while they took up 19.2% of new residential mortgages. Though there has been a downward decline in the past half-decade, these types of loans are still sought after by investors and homeowners looking to avoid arrears.
No-interest loans are available for only up to $2000 and may have restrictions on how the funds will be used. However, interest-only loans are readily available and provide lower initial repayments.
Most lenders offer interest-only periods of 1-5 years (up to 10 years for some investment loans).
Initially, repayments are lower, but over time, you may pay more interest compared to principal-and-interest loans.
Yes, most lenders allow you to switch at any time or the end of the interest-only term.
Interest-only loans are not recommended for first home buyers since it takes longer to repay the loan, and you don’t build equity in the home for the entirety of the interest-only period. Interest-only loans are ideal for investors.
Many lenders provide interest-only home loans, including banks and non-bank lenders.
For investment properties, yes—interest payments may be claimed as a tax deduction.
Your loan automatically switches to principal-and-interest repayments, increasing your monthly payments.
