In the interest-only loan, the borrower is required to pay the interest for some part of the term with an unchanged principal balance. These loans result in delaying the repayment associated with the borrowed amount in a fixed term that ranges from 3 to 5 years. In this time period, you are required to pay only the interest calculated on the loan and not the amount of principal. At the end of the term of the interest-only loan, the loan type will be switched to the principal and loan type, which will require repaying the borrowed amount.
Interest-only Loan
Interest-only Loan
Benefits of the Interest-only Loan
- The lower payments for the borrower during the time of the interest-only duration can facilitate in saving the money that can be used for paying off expensive debts. This will make the amount of monthly repayments significantly lower for the first 5 to 10 years.
- With the non-payment of the principal amount, it also enables the investors to fund other assets and put money in debts that are non-tax deductible.
- An interest-only loan type is a feasible option for those, who want to invest in the property market without the need to spend a large amount initially.
Interest-only Vs Principal and Interest
As compared to the interest-only loan type, the interest rate amount is higher in the case of principal and interest loan. In the latter loan type, you are paying the mortgage amount a little earlier in the loan duration, which will result in paying less amount of interest. Along with this, the borrower will incur less risk while going for the principal and interest loan as compared to the interest-only.
Why is it a smart choice to contact our mortgage brokers
Your expert guide in home buying journey
It is not an easy task to buy your first home. In fact it sure is one of the biggest financial decisions one makes in a lifetime. There is too much to know as it will be a completely new learning curve and no doubt there will be a lot of anxiety.
Therefore it definitely helps to have someone by your side throughout the home buying journey, making sure you understand the process every step of the way.
More options for all client profiles
Type of employment can have a bearing on what loan option and which bank will be best suited for you. We get cases for a lot of self employed clients who say that it has been difficult for them to get the desired loan. Our brokers specialise in loan applications for all types of employment. Whether you are self employed or on a casual or part time employment or having irregular incomes, our brokers have in-depth knowledge of the bank policies and can suggest a loan solution as per your unique situation.
Access to a wide range of loan products
Our brokers work for your benefit. They are not working for a particular bank, or vendor or any real estate agent. They have just your best interest in mind and therefore can compare a wide range of loan products.
Personalised attention
With Nfinity Financials you will get a personalised attention to your requirements, which you may not find with big corporate style financial institutions or banks. Our clients are our first priority.
Our Client Testimonials
See what our customers have to say about Nfinity Financials products, people and services.
Happy with Parag
“I have been happy with my experience with Parag – while processing our loan, he was communicative, approachable and patient with us. He is quite knowledgable and knows what he talks about…”
The Agent who goes Above and Beyond!!
“An absolute Star! Parag is a thorough professional with excellent knowledge of the property market, the various loan options available and excellently managed to deliver a product within our budget…”
“Excellent service and support. Would highly recommend Parag Dixit for any kind of financial needs. I got my home loan done, and the entire process was very smooth and timely. Great work.”
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Our mission is to provide reliable, quick and trustworthy mortgage services.
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1300-438-562
info@nfinityfinancials.com
Suite 215, East Wing, 33 Lexington Drive, Bella Vista NSW- 2153
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