What is an Interest Only home loan?
With an Interest Only (IO) home loan, you only pay off the interest charged on your loan balance. This means your repayments are less compared to a Principal & Interest loan.
An IO loan could be a good short term option. Remember, for your IO period, you're not paying down your Principal (the loan amount you borrowed) so you'll pay more over the life of the loan.
Athena has super sharp rates for IO compared to other lenders and we can match your scenarios with personalised credit assessments.
Go through your home loan options with our loan experts by filling in our form >>
How to IO like a PRO
Our steps to making sure you get the most of Interest Only.
💜 Have a plan for when you will start paying the loan principal. Be aware that when you start paying the principal, your repayments would be higher compared to Interest Only repayments
💜 See how you can reduce your Interest Only loan repayments by making regular or ad hoc extra payments into your redraw or offset
💜 Keep an eye on your circumstances changing and switch back to P&I ahead of time if you can
💜 Calculate the additional cost of Interest Only over the period you’ll use it. Choosing an Interest Only mortgage for a period of the loan will mean you pay more interest overall over the life of the loan
Why choose Interest Only?
Flex your cash flow with Interest Only to suit any of these situations.

Fixed rate ends
You’ll find a softer landing by reducing your home loan repayments for a chunk of time.

Savvy investor
Maximise cashflow, minimise your tax and achieve your investment property goals faster.

Big life change
Maybe you need time off work, a change of job, you start your own business or your family grows.

Tight budget
Trim your household budget with an IO loan for renovations, repairs, savings, or investments.
Interested?
We have an Interest Only home loan between 1-5 years of variable rate (or 1-3 years fixed interest only^^) to help manage your cashflow.
Athena lets you switch to Principal & Interest at any time, and make unlimited additional repayments on your loan without a penalty fee.
When your selected Interest Only period ends, you’ll automatically switch to our best Principal & Interest home loan rate for your LVR tier.

For the home I live in
Get up to 5 years Interest Only, or swap to Principal & Interest anytime you want.
Interest Only loan interest rates
Choose from Straight Up: no fees, no loyalty tax, with a redraw. Choose Power Up: no fees, no loyalty tax plus multi offsets and split loans. Alternatively, go fixed rate for repayment stability.
Comparison rate calculated on a $150,000 secured loan over a 25 year term^
Owner Occupier rates | Interest Only
LVR Tier | Rate | Comparison Rate |
---|---|---|
0-50% Obliterate | 6.49% | 6.35% |
50-60% Celebrate | 6.49% | 6.36% |
60-70% Evaporate | 6.49% | 6.38% |
70-80% Liberate | 6.49% | 6.40% |
Investor | Interest Only
LVR Tier | Rate | Comparison Rate |
---|---|---|
0-50% Obliterate | 6.54% | 6.43% |
50-60% Celebrate | 6.54% | 6.44% |
60-70% Evaporate | 6.59% | 6.48% |
70-80% Liberate | 6.64% | 6.54% |
Meet our loan experts.
Want to understand more about Principal & Interest vs Interest Only before you apply?
Our Australian home loan experts are here 5 days a week.
Learn more about Interest Only

Is an Interest Only home loan right for me?
Making your mortgage repayments as low as possible may seem like a no-brainer.

Principal & Interest vs Interest Only
It’s all about paying it off or putting it off. What is a Principal & Interest home loan?

How home loan interest rates work
Setting the record straight on home loan interest rates.
Interest Only FAQs
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