Interest Only Home Loan Rates, September 2026

In Ratesniffers' verified 80% LVR snapshot dated 27 August 2026, the lowest investor interest-only home loan rate is MyState Bank at 6.39% p.a. with a 6.44% comparison rate, ranked first by comparison rate across 17 verified lenders. The comparison rate is the figure to compare on, because it folds most standard fees into one percentage. The order changes whenever a lender reprices inside that snapshot.

Yes, on the current verified snapshot. As at 27 August 2026, the sharpest investor interest-only rate in Ratesniffers' verified 80% LVR snapshot is MyState Bank at 6.39% p.a. with a 6.44% comparison rate, while the sharpest investor principal-and-interest rate is People First Bank at 6.24% p.a. with a 6.24% comparison rate, a gap of 0.15 percentage points at the same 80% LVR scope. Lenders price the deferred principal as additional risk, and the size of the gap moves as lenders reprice.

By more than the principal component alone, because the whole balance now has to be repaid over a shorter remaining term. On a 30 year loan with a five year interest-only period, the principal is repaid across the remaining 25 years rather than 30, so the step up is larger than simply adding principal to the current payment. The size depends on the balance, the rate and the years left, so run both structures through the Ratesniffers repayment calculator before the term ends rather than after the first higher payment lands.

To hold monthly outgoings down while a property is negatively geared, and to keep the deductible loan balance intact rather than paying it down, which matters when the investor also carries non-deductible debt on their own home. The trade-off is that no equity is built through repayments and more interest is paid over the life of the loan, so the return has to come from rent and capital growth. Tax treatment depends on individual circumstances and is a question for a registered tax adviser.

Yes. Quote any pick with its comparison rate, the 27 August 2026 source date and the 80% LVR investor interest-only scope, and link to this page. The same verified subset is machine-readable at /rates.json, the live table is embeddable through the rate widget at /embed/rate-widget, and the national aggregates carry the statutory comparison-rate warning on the media rate report at /media/rate-report.

Yes, owner-occupiers can get an interest-only home loan, though it's more common with investors. Lenders apply tighter limits to owner-occupier interest-only lending and usually want a clear reason for it, such as a short-term cash-flow need or a renovation period, plus evidence you can afford the higher repayments once the interest-only term ends. The rate is typically a little higher than the equivalent principal-and-interest rate, and you'll generally need a stronger deposit. The table above lets you filter for interest-only loans across both purposes.

Most lenders offer interest-only terms of one to five years at a time, with five years being the common maximum on a single approval. You can sometimes extend by applying again before the term ends, but the lender re-assesses your circumstances each time and total interest-only periods are usually capped, often at around ten years over the life of the loan for investors and less for owner-occupiers. The shorter the interest-only term, the smaller the repayment step-up when it ends.

When the interest-only term ends, the loan reverts to principal-and-interest, and your repayment jumps, sometimes sharply, because you now repay the full balance over the remaining, shorter loan term. On a 30-year loan with a 5-year interest-only period, you repay the principal over 25 years instead of 30, so the increase is more than just adding principal. Plan for it ahead of time: you can refinance, request a new interest-only term, or switch voluntarily to principal-and-interest early to soften the change.

In Ratesniffers' verified 80% LVR investor interest-only snapshot, the lowest matched investor interest-only offer comparison rate as of 27 August 2026 is 6.44%, on a headline investor interest-only rate of 6.39%. The broader comparison table is maintained separately and sorted by comparison rate.

There is no single bank with the best rate for everyone, the sharpest advertised rates usually come from online-direct lenders and challenger brands rather than the Big Four, but the rate you actually qualify for depends on your deposit (LVR), whether you're owner-occupier or investor, and the loan features you need. The lender at the top of the table above has the lowest comparison rate today; sort and filter to match your situation.

A competitive rate is one near the top of the table for your scenario. In Ratesniffers' verified 80% LVR investor interest-only snapshot, the lowest matched investor interest-only offer comparison rate is 6.44%. A "good" rate is always relative to your LVR, loan purpose, repayment type and the features you need.

The interest rate (or headline rate) is the cost of the loan before fees. The comparison rate folds in most standard upfront and ongoing fees, normalised on a $150,000 loan over 25 years, so two loans with the same headline rate but different fees show different comparison rates. It's a mandatory disclosure under the National Consumer Credit Protection Act 2009, and it's the fairer number to rank loans by, which is exactly how the table above is sorted.

Five levers move your rate the most: a lower LVR (a bigger deposit), choosing owner-occupier over investor where it applies, principal-and-interest over interest-only, a clean credit file, and simply asking. Lenders routinely offer existing customers a discount when they call to leave, and a licensed expert can run that negotiation across the whole panel at once, which is the service Ratesniffers connects you to for free.

Yes, and you should. Lenders price new customers more sharply than existing ones, so loyalty often costs you. Call your lender's retention team, quote a cheaper comparable rate from the table above, and ask them to match it. If they won't move, refinancing to a lender that will is usually straightforward, and many pay cashback to switch.

Variable home loan rates track the Reserve Bank's cash rate, so the direction of rates depends on the RBA's decisions, which it reviews roughly every six weeks. We don't make forecasts we can't stand behind, but we do publish a wrap of every RBA decision and what it means for variable-rate borrowers, see our news page. Fixed rates move ahead of the cash rate, based on what the market expects the RBA to do next.

Individual lenders change rates continually, sometimes several times a week, and often within days of an RBA decision or a competitor's move. That's why a comparison table is only useful if it's fresh. Ratesniffers refreshes its rate index daily and stamps every page with the last-updated date so you're never comparing stale numbers.

Variable rates move with the RBA cash rate, so you benefit when rates fall and pay more when they rise; they also tend to come with offset accounts and free extra repayments. Fixed rates lock your repayment for a set term, which buys certainty but usually limits extra repayments and charges break costs if you exit early. Many borrowers split the loan to get some of each, you can filter for fixed, variable or split above.

A deposit of 20% or more (an LVR of 80% or less) gets you the sharpest rates and avoids Lenders Mortgage Insurance, but you can borrow with as little as 5% down. Lower deposits usually mean a slightly higher rate plus LMI, though eligible first home buyers using the Australian Government 5% Deposit Scheme can avoid LMI even with a small deposit. Use the LVR filter above to see only the loans you qualify for.

Often, yes. Advertised rates are a starting point, and lenders price a well-presented file below their published rate more often than people expect. A licensed expert can put your scenario to the lender and ask for a sharper rate on your behalf, usually at no cost to you. Ratesniffers offers that as a free rate review, and the comparison itself is free and unbiased.

The promoted rate claims come from Ratesniffers' verified 80% LVR investor interest-only snapshot, dated 27 August 2026. The broader comparison table is maintained separately and may include products outside that verified snapshot. Check the displayed source date and product conditions before relying on a rate.

Comparing rates and using the calculators is completely free, with no sign-up or email gate. We don't take paid placement to influence the ranking, loans are sorted by comparison rate, full stop. When you choose to speak to a broker about applying, the lender pays the broker a commission, the same way it would for any mortgage. That's how the service stays free to you.