PRINCIPLE & INTEREST
The most suitable “home” loan – as over time the balance reduces giving you more equity in your home. You can chosoe to havfe the full amount FIXED or split it with part variable and pay extra off the variable portion IF/WHEN you can afford it…and redraw any extra pre-paid funds if required for daily living expenses.
INTEREST ONLY
Is mostly suitable for “investment” loans as the interest is tax deductible , along with other investment property expenses (rates, insurande , mainenance etc & Body Corp fees if applicable. etc)
Some lenders will allow interest to be paid IN ADVANCE but you should talk to your tax adviser if interested in this as it may affect your taxes etc.
