Principal and interest home loans require borrowers to pay back the money they borrowed from the lender as well as the interest charged. This means the amount paid each week, fortnight, or month is likely to remain fairly stable throughout the loan term. Interest-only home loans only require borrowers to pay off the interest portion of the loan for the first one to five years before reverting to principal and interest repayments. These loans may have cheaper initial repayments, but the repayments are likely to increase once the principal component starts being paid off.