Owner Occupier loans should almost always be repaid via Principal and repayments. Generally speaking, most lenders only allow Interest only repayments if there is a solid reason, and it is temporary only. It means your loan is reducing every time you make a P&I repayment. The target should be to pay off the Owner Occupier loan as fast as you possibly can. Different strategies apply when buying an investment property. While there are benefits of making P&I repayments (loan is decreasing all the times), many people chose to make interest only repayments on their Investment loans.  Note: It is better to speak with your accountant and make a strategy. Furthermore, discuss with your mortgage broker all the pros and cons of each, and make an informed decision.