8 Jul 2016
INTEREST ONLY AND PRINCIPAL AND INTEREST LOANS
Interest only loans means you are only paying the interest component of the loan. The principal loan amount you initially borrow will remain the same and not reduce. These loans are predominantly used for investment loans as this maximises the tax deductibility of you loan.
Principal and interest loan, means that you loan is consistently reducing with every single loan repayment. This is the best type of loan, if you are looking to repay your loan as quickly as possible.
Please ensure you seek professional advice from your accountant when assessing your Tax Deductibility.