Principal & Interest Loan

Principal & Interest Loans are usually taken by owner occupiers who want to eventually own their own home.

With this type of loan, the repayments are made up of the monthly interest on the outstanding balance plus an amount which will reduce the principal.

Principal and interest loans are usually taken out over a 25 to 30 year period, at the end of which the loan is paid out in full.

As there are no tax advantages for owner occupiers, it is best to pay these loans out as soon as possible. In some instances if these loans are paid out early, the borrower will be exposed to an early payout penalty or in some instance a delayed establishment fee.