Pacific Mortgage

Interest Only

Interest Only

Pacific Mortgage

You repay only the interest on the amount borrowed usually for the first one to five years of the loan, although some lenders offer longer terms. But recent government pressure has resulted in higher rates for “Interest Only” loans. Because you’re not also paying off the principal, your monthly repayments are lower. At the end of the “Interest Only” period, you begin to pay off both interest and principal. These loans are especially popular with investors who plan to pay off the principal when the property is sold or when planning to retire and live of the rent, or sell having achieved capital growth. You can pay off extra if you want to anyway – if variable.

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