Compare loan structures side by side and see the real cost difference.
Quick Answer
Interest-only loans have lower monthly repayments than principal & interest (P&I) but do not reduce your loan balance — you owe the same amount at the end of the interest-only period. P&I loans cost more each month but build equity over time. Most NZ investors use interest-only to maximise cash flow; most owner-occupiers use P&I. Enter your loan details below to compare both structures side by side over your full loan term.
Interest-only loans are popular with NZ investors for improving short-term cash flow and maximising tax deductions. They work best when capital growth is expected to outpace the extra interest cost.
Learn more →While IO reduces monthly payments, you pay interest on the full loan for longer. After the IO period ends, P&I repayments on the remaining balance can jump significantly, causing payment shock.
Learn more →Interest deductibility for residential investment properties is being phased back in as of 2025–2026. Check with your accountant for current rules, as deductibility affects the true after-tax cost of IO loans.
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