An interest only home loan is where you only pay the interest charges on your home loan. Investors might choose an interest only home loan to boost cashflow. This is because repayments are typically lower than those on a principal and interest (P&I) home loan. You can also benefit from capital growth even though you’re not paying back the original loan amount. Most banks have a maximum interest only period, which you can extend based on the bank’s initial assessment once the period is up. Or your loan might revert to P&I automatically. By comparison, a standard home loan is P&I, where your repayments go towards paying back a portion of the original loan amount and the interest accrued. This is a great option if you want to increase your equity while benefitting from lower repayments. At the end of the day, your repayment option is entirely up to you.