What are my repayment options?
At the moment, you can only make principal and interest repayments on your ANZ Plus Home Loan. Though we don’t offer interest only repayments, it’s worth taking a closer look so you can decide what type of loan is right for you.
What are repayments?
Generally speaking, to fully pay off a loan you must repay the principal, and any accrued interest and fees. The principal is the amount of money you borrowed, and the interest is the cost charged by the bank for borrowing that money – typically expressed as an annual percentage rate of the principal outstanding.
Typical differences between repayment types.
Principal and interest repayments:
- Require you to pay down your principal and the interest that has been charged.
- Less interest may be paid over the life of the loan as your principal will be reduced by your repayments.
Interest only repayments:
- Minimum repayments will initially be lower as you’re not required to repay the principal during the interest only period.
- There may be more interest to pay over the life of the loan as you're not required to reduce the principal during the interest only period.
- At the end of the interest only period, the loan will switch to principal and interest repayments for the remainder of the loan term unless the interest only period is extended.
- Interest only payments might better suit certain borrowers depending on their specific tax and investment needs.
The information above is general in nature and doesn't constitute tax advice. We encourage you to get independent advice if you're considering the right repayment type for you.