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Zac M.
Zac M.
Panania, NSW


I have a question about my home loan as the interest only period expires in early May. I want to keep it interest only but the bank has said no and it will be principal and interest. There is no problem making the repayments but I would just prefer interest only. Is refinancing my only option?


6 years ago


Hi Zac,
Great question. Unfortunately most lenders are under pressure from ASIC & APRA to reduce interest only lending and as a result once the interest only period expires will almost compel you to go to principle and interest payments.
We have had some successes where clients wanted to stay with their current lender and extend the interest only period.
Please feel to contact me on 02 9844 5839 to discuss this further if you wish.
Awesome Albert Waldron

Hi Zac

As Albert has advised above; lenders are clamping down on interest only loans; especially if the property is your principle place of residence.

Based on what you have said; your only option to continue with interest only would be to refinance; however please note that you are going struggle finding a lender who is going to approve a loan on an interest only basis without a valid reason why you are looking to keep your loan interest only.

In summary there is really no clear benefit paying interest only on your loan as you are not reducing your balance owed. This creates a risk for you as you are potentially placing yourself in a risky situation if rates rise.

I am more than happy to discuss this in more detail if you wish. You can contact me on 0414 727 308.


South West Lending Solutions

Hi Zac,
Is refinancing my only option?
No it is not, although it is probably the option that would allow you to achieve your wish to have interest only repayments.
Having said that, lenders are charging higher rates on interest only loans, so you may discover that a lower rate Principal & Interest loan would be of greater benefit to you.
You would likely have a lower monthly commitment and be able to reduce the loan balance at the same time.
It does come down to looking at both your current goals and future goals.
I'd be happy to talk to you about that and the loan options.

Hi Zac,
I would ask you a few more questions before looking at refinancing. Do you have any debts other than this loan? Is it owner occupied or investment? What are you medium term goals and financial needs?
If it is owner occupied and you could get an interest rate below 3.80% there is no benefit in paying interest only just to lower your repayments by a couple of hundred dollars per month.
I would suggest you go and sit with one of these three guys and put everything on the table, you will probably be surprised by what they can get done for you
Best of luck

Hi Zac,

I’m the NSW Partnership Manager / BDM for VMG.

Depending on your circumstances, VMG can offer Interest Only loans currently. Any Mortgage Broker can speak to me about this and obtain quick & direct accreditation with us.

I hope this helps. Feel free to reach out of your have any questions.


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