Principal and interest repayments:
This means your regular home loan repayments pay down both the amount you’ve borrowed (the principal) and the interest you’ve accrued.
Interest only repayments:
This simply means you’re only paying down the interest for a set period of time, usually one to five years. When you repay interest only, the total amount borrowed (the principal) will not reduce.
Which option is right for me?
Keep reading to understand why you might choose to pay principal and interest or interest only.