Interest Only Home Loan Calculator Australia — Compare Rates & Payments
An interest only home loan calculator Australia helps you understand how interest-only mortgages work and calculate your monthly payments. With an interest-only loan, you pay only the interest on your loan for a set period (typically 1-5 years), without repaying any principal. This can lower your monthly payments initially, but you'll need to repay the full loan amount or switch to principal & interest payments after the interest-only period ends. Compare interest only home loan rates from major Australian banks like Westpac, ANZ, NAB, CBA, and ING.
What is an Interest Only Home Loan?
An interest only home loan (also called an interest-only mortgage) is a type of home loan where you pay only the interest portion of your loan for a specified period, typically 1-5 years. During this period, your monthly payments are lower because you're not repaying any principal. After the interest-only period ends, you must either:
- • Repay the full loan amount (balloon payment)
- • Switch to principal & interest repayments
- • Refinance the loan
Interest-only loans are popular with investors who want to maximize cash flow or plan to sell the property before the interest-only period ends. However, they typically result in higher total interest costs over the full loan term compared to principal & interest loans.
Interest Only Home Loan Calculator
Our interest only home loan calculator helps you:
- • Calculate your monthly interest-only payment
- • Determine total interest paid during the interest-only period
- • Compare interest-only vs. principal & interest loans
- • See how different interest rates affect your payments
- • Compare rates from major Australian banks
Simply enter your loan amount, interest rate, and interest-only period (in years). The calculator shows your monthly payment, total interest, and compares it with a standard principal & interest loan over 30 years.
Interest Only Home Loan Rates Australia
Interest only home loan rates Australia vary by lender, loan-to-value ratio (LVR), and whether the property is owner-occupied or investment. Generally, interest-only rates are slightly higher than principal & interest rates. As of 2025, typical interest-only rates range from:
- • Owner-occupier: 6.0% - 7.0% p.a.
- • Investment property: 6.2% - 7.5% p.a.
Rates can vary significantly based on your credit score, LVR, loan amount, and lender policies. Use our calculator to compare interest only home loan rates comparison from different banks and see how rate changes affect your monthly payments.
Interest Only Home Loan Calculator Westpac
Westpac is one of Australia's largest banks and offers competitive interest-only home loans. Our interest only home loan calculator Westpac functionality allows you to:
- • Calculate Westpac interest-only loan repayments
- • Compare Westpac rates with other lenders
- • See how Westpac's loan features affect your payments
Westpac offers interest-only periods of up to 5 years for investment properties and up to 5 years for owner-occupier loans (subject to conditions). Use the calculator to estimate your Westpac interest-only payments and compare with other banks.
Interest Only Home Loan Calculator ANZ
ANZ (Australia and New Zealand Banking Group) offers flexible interest-only home loan options. Our interest only home loan calculator ANZ helps you:
- • Calculate ANZ interest-only repayments
- • Compare ANZ rates with Westpac, NAB, CBA, and others
- • Understand ANZ's interest-only loan terms
ANZ typically offers interest-only periods of 1-5 years for investment properties. Use the calculator to estimate your ANZ interest-only payments and see how they compare with other lenders.
Interest Only Home Loan Calculator NAB
NAB (National Australia Bank) provides competitive interest-only home loan products. Our interest only home loan calculator NAB allows you to:
- • Calculate NAB interest-only loan repayments
- • Compare NAB rates with other major banks
- • See how NAB's offset accounts work with interest-only loans
NAB offers interest-only periods typically up to 5 years for investment properties. Use the calculator to estimate your NAB interest-only payments and compare with Westpac, ANZ, CBA, and ING.
Interest Only Home Loan Calculator CBA
Commonwealth Bank (CBA, also known as CommBank) is Australia's largest bank and offers various interest-only home loan options. Our interest only home loan calculator CBA helps you:
- • Calculate CBA/CommBank interest-only repayments
- • Compare CBA rates with other lenders
- • Understand CBA's interest-only loan features
CBA offers interest-only periods typically up to 5 years for investment properties. Use the calculator to estimate your CBA interest-only payments and see how they compare with other banks.
Interest Only Home Loan Calculator ING
ING is a digital bank offering competitive interest-only home loans in Australia. Our interest only home loan calculator ING allows you to:
- • Calculate ING interest-only loan repayments
- • Compare ING rates with traditional banks
- • See how ING's digital features benefit borrowers
ING typically offers competitive rates and flexible interest-only periods. Use the calculator to estimate your ING interest-only payments and compare with Westpac, ANZ, NAB, and CBA.
Interest Only Home Loan Calculator NSW
If you're buying property in New South Wales (NSW), our interest only home loan calculator NSW helps you understand interest-only loans specific to NSW property markets. NSW has some of Australia's highest property prices, making interest-only loans attractive for investors who want to maximize cash flow.
Use the calculator to estimate your interest-only payments for NSW properties and compare rates from major banks operating in NSW, including Westpac, ANZ, NAB, CBA, and ING.
Interest Only Mortgage Payment Calculator
An interest only mortgage payment calculator calculates your monthly payment for an interest-only mortgage. The calculation is straightforward:
Monthly Payment = Loan Amount × (Annual Interest Rate ÷ 12)
Unlike principal & interest loans, interest-only payments don't reduce your loan balance. The loan amount remains the same throughout the interest-only period, and you'll need to repay it in full or switch to principal & interest payments after the period ends.
Interest Only Home Loan Rates Comparison
Comparing interest only home loan rates is crucial to find the best deal. Our calculator includes a rate comparison feature showing rates from major Australian banks:
- • Westpac: Typically 6.3% - 6.8% p.a. for interest-only
- • ANZ: Typically 6.2% - 6.7% p.a. for interest-only
- • NAB: Typically 6.1% - 6.6% p.a. for interest-only
- • CBA: Typically 6.4% - 6.9% p.a. for interest-only
- • ING: Typically 6.0% - 6.5% p.a. for interest-only
Rates vary based on loan-to-value ratio, credit score, loan amount, and whether the property is owner-occupied or investment. Use the calculator's comparison feature to see how different rates affect your monthly payments and total interest.
Advantages and Disadvantages of Interest-Only Loans
Advantages:
- • Lower monthly payments during the interest-only period
- • Better cash flow for investors
- • Tax benefits for investment properties (interest is tax-deductible)
- • Flexibility to sell before the period ends
Disadvantages:
- • Higher total interest costs over the full loan term
- • Loan balance doesn't decrease during interest-only period
- • Must repay full amount or switch to P&I after period ends
- • May face higher payments after the interest-only period
Use our calculator to compare interest-only vs. principal & interest loans and see the total cost difference.
How to Use the Interest Only Home Loan Calculator
Follow these steps:
- Enter Loan Amount: Input your home loan amount in Australian dollars.
- Enter Interest Rate: Input the annual interest rate (as a percentage).
- Enter Interest-Only Period: Input how many years you'll pay interest-only (typically 1-5 years).
- Review Results: See your monthly payment, total interest, and comparison with principal & interest loans.
- Compare Bank Rates: Enable the comparison feature to see rates from Westpac, ANZ, NAB, CBA, and ING.
- View Payment Schedule: Click "Show Schedule" to see month-by-month payment breakdown.
Example Calculations
Example 1: Interest-Only Loan
Loan: $500,000, Rate: 6.5%, Interest-Only Period: 5 years
Monthly Payment: $2,708 (interest-only), Total Interest: $162,500
Example 2: Comparison with Principal & Interest
Same loan ($500,000, 6.5%) with Principal & Interest over 30 years:
Monthly Payment: $3,162, Total Interest: $638,220
Note: After 5 years of interest-only, you'd still owe $500,000 and need to repay it or switch to P&I.
Example 3: Rate Comparison
$500,000 loan, 5-year interest-only period:
Westpac (6.5%): $2,708/month, $162,500 total interest
ING (6.2%): $2,583/month, $155,000 total interest
Difference: $125/month, $7,500 total interest saved
FAQ: Interest Only Home Loan Calculator
Q: How is interest-only payment calculated?
A: Monthly payment = Loan Amount × (Annual Interest Rate ÷ 12). For example, $500,000 at 6.5% = $500,000 × (0.065 ÷ 12) = $2,708 per month.
Q: Can I get an interest-only loan for owner-occupied property?
A: Yes, but it's less common. Most lenders offer interest-only loans primarily for investment properties. Owner-occupier interest-only loans typically have shorter periods (1-5 years) and stricter conditions.
Q: What happens after the interest-only period ends?
A: You must either repay the full loan amount (balloon payment), switch to principal & interest repayments, or refinance. Most borrowers switch to P&I payments, which will be higher than the interest-only payments.
Q: Are interest-only loans tax-deductible?
A: For investment properties, yes—interest payments are tax-deductible. For owner-occupied properties, interest is not tax-deductible. Always consult a tax advisor for your specific situation.
Conclusion
An interest only home loan calculator Australia is essential for understanding how interest-only mortgages work and comparing them with principal & interest loans. Whether you're considering an interest-only loan from Westpac, ANZ, NAB, CBA, ING, or another lender, this calculator helps you understand your monthly payments, total interest costs, and make informed decisions. Use it to compare interest only home loan rates and see how different rates and periods affect your payments.
Remember that interest-only loans can provide lower monthly payments initially but typically result in higher total interest costs. Always consider your long-term financial goals and consult with a mortgage broker or financial advisor before making a decision.