Interest-Only vs P&I
Compare loan structures side by side and see the real cost difference.
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.
Loan details
When IO makes sense
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 →The true IO cost
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 →NZ interest deductibility
Interest deductibility for residential investment properties was fully restored from 1 April 2025 — mortgage interest is 100% deductible again. Deductibility affects the true after-tax cost of IO loans, so confirm the details with your accountant.
View data sources →All results are general information only and do not constitute financial advice. Figures are estimates based on the details you enter — always do your own due diligence or speak to a licensed financial adviser before making decisions.