What happens to my home loan at the end of my interest only term?

When you applied for your interest only loan, you would have nominated the period of your interest only term. This is usually 1 to 5 years. At the end of your interest only term, your loan automatically changes to a variable rate loan with principal and interest repayments. As a result, your repayment amount may change and is likely to be higher. But that’s not the end of the story. You do have other options.

What are my options after my interest only term ends?

While your loan will revert to a variable rate loan with principal and interest repayments, you’re not locked into that. Depending on what is important to you, other potential options could include:

  • extending your interest only term (subject to assessment and approval)
  • switching to a fixed rate term
  • just staying on a variable rate with principal and interest repayments.
  • If you’re not sure whether to switch to a fixed or stay on a variable rate, you can even split your home loan so part of it is fixed and the other part is variable.

Still wondering ‘what happens when my interest only mortgage ends’?

Wth all these options, it can be a little confusing to figure out what’s right for you. But don’t worry, we’ll get in touch with you before your interest only term expires (around 30 to 60 days prior) with more information about the options you can consider and the steps you’ll need to take.


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