MFAA Member · ACL 389328 · IO Specialists
Interest-Only Home Loan — Interest-only
loans, done right.
Investor portfolios + select owner-occupier files. Interest-only loans free up cashflow, maximise tax-deductible debt (for investors), and let you direct savings to where they work hardest. The catch: APRA caps IO portions of lender books, rates run higher, and rollover requires planning.
Annual IO review.
Every IO loan we manage gets reviewed 6 months before rollover. APRA changes, lender rate shifts, and your own circumstances may have moved — we catch it before automatic conversion to P&I hits.
Tax-deductibility framing.
We don't give tax advice (your accountant does) — but we structure IO loans so the deductibility math is clean and your accountant can work with it.
Rate-premium minimised.
IO rates run 0.2-0.5% above P&I rates. We negotiate the smallest gap possible and compare across the IO-active lender panel — not every lender wants IO files.
From first call to settlement
Easier than you'd think.
Why IO?
We discuss whether IO is the right structure for your situation — or whether P&I is better.
Lender + term placement
1, 2, 3, 4, or 5-year IO terms. Lender appetite varies — we place where it fits.
Submit + settle
Standard application process. Pre-approval 5-10 business days.
Annual review + rollover plan
We track your IO term. 6 months before rollover, we review options — extend IO, convert to P&I, refinance, or restructure.
Frequently asked questions.
How long can my interest-only term run?
Most lenders offer 1, 2, 3, 4, or 5-year IO terms. Some specialist lenders extend further. After the IO term, the loan automatically converts to principal-and-interest unless you proactively request an extension.
Is the rate higher on an interest-only loan?
Yes — typically 0.2-0.5% above the equivalent P&I rate. The premium reflects APRA's regulatory pressure on lender IO books (capped at 30% of new lending). Investor IO loans typically run higher than owner-occupier IO loans.
What happens when my interest-only term ends?
The loan automatically rolls to principal-and-interest. Repayments increase (you're now paying down principal too) over a shorter remaining term. We review every IO loan 6 months before rollover so this isn't a surprise — you can extend IO, refinance, or restructure.
Can I switch back to interest-only later?
Yes, but it requires application — not automatic. The lender reassesses your serviceability. APRA caps mean lenders prioritise existing customers + investors over OO. We can usually arrange it where the file supports it.
Should I use IO on my owner-occupier home loan?
Generally not — unless you have separate investment debt and want to pay non-deductible debt down first. Owner-occupier IO costs more total interest without the tax benefit. Investors are the main IO use case.
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