An Interest Only Home Loan lets you pay only the interest on your loan amount for a fixed period, typically one to five years. Once this period ends, you're obligated to start repaying the principal and the interest. Your options at this stage are: continuing with principal-interest repayments, refinancing with another lender, clearing the remaining loan balance, or, with lender's consent, setting up another term of interest-only repayments.

This loan type gives you payment flexibility in the initial period.