Let's put it this way: if you choose an interest only home loan, the minimum payments of your home loan will be lower during the interest only period because you are not required to repay the principal balance. You will have to repay the principal down the track and you will pay more over the life of your home loan.There may be additional restrictions on the amount you can borrow or loan type you can select if you choose to pay interest only. Choosing to repay principal and interest means that you're actually paying off the total home loan amount over the period of the loan, not just the interest charges.