Interest-only loan
An interest-only loan is one where you pay only the interest for a set period — nothing off the principal — maximising cashflow and tax-deductible interest.
Investors commonly run rentals interest-only while paying principal on their own home (whose interest isn't deductible) — directing repayment where it does the most good. Banks typically approve interest-only in blocks of up to five years, and servicing is still tested on principal-and-interest terms. The risk: the debt never shrinks unless growth or strategy handles it.
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