Do Interest Only Home Loans Still Make Sense?

UNO home loans

Six months ago interest only loans made a lot of sense for property investors. Today, the story is very different.

18 years ago I was living out of a tent, in a little village named Balibo, on the top of a mountain in East Timor when Matt, a mate of mine, said something that’s stuck with me ever since. What did he say? “No one ever went broke making a profit” Why is that important? Because for eons, people’s innate aversion to pay the taxman has led to a string of poor financial decisions, which have been slowly bleeding them dry. One of those poor decisions (not in every case of course) is interest only loans. 10 years ago interest only loans made a lot of sense. The interest rates on interest-only loans were basically on par with principal and interest loans. It made perfect sense to go down that path to free up cash flow and maximise the tax-deductible portion of outgoings (the interest part of your home loan repayment). Today, the story is very different. Price pressures from industry regulators have increased the costs of interest-only loans so much that for most property investors, choosing an interest-only loan could be costing them thousands. The problem with this is, hardly anyone has changed their tune in terms of the type of loans they recommend to investors. Why? Well, they’re either lazy, they haven’t figured it out yet (pretty much the same as lazy) or they don’t have the smarts to articulate the risk vs reward. So to bust this lazy myth wide open we’ve developed a new calculator.

How can it help you?

This calculator will help you work out which loan type provides you the most benefit. We calculate the results by taking into consideration:

The interest cost of the investment loan compared to the tax savings of negative gearing
The amount you’ll be owing compared to your repayments

What do your results mean?

If your result is a positive figure (green coloured), you could be better off choosing a principal and interest loan. If your result is negative, you could be better off choosing an interest-only loan. Transparency is the cornerstone of everything we do at UNO. It’s why we get out of bed everyday. We couldn’t care less if you choose an interest only loan or a principal and interest loan. What we care deeply about is that it’s the right loan, for your specific situation, right now. To find out what works for you, use the calculator right here: And if you want to take it one step further than the calculator, you can book a call with our customer care team today. Book a call in with UNO

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TESTIMONIALS

What our customers are saying

Desert Rose

February 4, 2026

I reached out to Mike Parsons and he was knowledgeable, tailored his advice to my specific situation and offered options which were aligned with my goals. Above all he was understanding and professional.The whole process was smooth and stress-free. Mike offered exceptional service and kept me updated throughout the whole approval process.

Mac

February 4, 2026

I highly recommend Mike Parsons from Uno Home Loans. He is a clear, patient communicator who made the complex loan application and settlement process easy to understand. Mike is very thorough and reassuringly meticulous with documentation. He was generous with his time, always prompt with answers, and handled multiple applications and extensions for us seamlessly, while giving useful advice on loan options along the way, even if it meant more work for him. Most importantly, Mike secured us a great loan when other brokers couldn't. I’ve already recommended him to friends and will continue to do so. The best broker I have used out of the several i have interacted with.

Christian Hartwig

January 28, 2026

Worked with 4 brokers now, 2 from uno one two with lendi. Uno is best, and jake is the best from uno. <3

Shona Vetenibua

January 5, 2026

We can’t recommend Paul highly enough. He truly went above and beyond for us and made what could have been a stressful process feel simple and manageable. Paul’s communication was clear and honest from the start. He was straight up about everything, provided us with a clear list of what we needed to supply, and then took care of the rest. He was transparent throughout the entire process and always took the time to answer our questions — no matter how big or small. As first-home buyers purchasing in a new country, we were nervous going in, but Paul made the whole experience easy and reassuring. We felt supported every step of the way and genuinely appreciated his professionalism and guidance. Very appreciative of everything Paul did for us — we couldn’t have done it without him.

Miten Chauhan

December 31, 2025

We had the pleasure of working with Paul Davey to secure a home loan for our first home. Paul was extremely knowledgable and helped make the entire journey of securing a property in Australia a breeze. We can't thank you enough for everything you did Paul, you are a true legend. Thank you very much! We'll be back for our next property.

Jamal Miller

December 29, 2025

Mike was recommended to us by a friend and exceeded expectations. He was extremely informative, patient, and flexible, and made our first home purchase a smooth experience. Beyond securing a great rate, the real value was how he managed all communication between solicitors, lenders, and other parties. This made settlement seamless and was incredibly helpful for us as time-poor buyers. Highly recommend.

Tutana Outram

December 20, 2025

Jesse provided exceptional guidance throughout our refinance, home sale, new purchase, and the construction loan for our family home. His professionalism, clear communication, and attention to detail made every stage of the process seamless. Highly recommended.

Stephen Hutchinson

December 18, 2025

We would like to thank Scott Wilkinson for all of his help refinancing our home loan. The service was excellent. Highly recommend Scott and UNO.

Alice V

December 5, 2025

great experience - very supported throughout the whole mortgage arrangement process

Cassie Ninness

December 1, 2025

Jake was fantastic when refinancing our home loan. The whole process was made so easy by Jake who had a lot of knowledge, was attentive and kept us well informed through the whole process. Such an easy and positive experience and I would recommend him and his services to anyone.

Kobe Ferguson

November 29, 2025

I had the absolute pleasure of working with Jake de Ruyter on our home loan application, and I couldn’t recommend him highly enough to anyone looking to finance a new home. From his lightning-fast response times to his extensive knowledge across every stage of the process, Jake has been a breath of fresh air during what can be a very stressful period. He made sure we understood each step clearly and took the time to explain anything we weren’t familiar with in a way that genuinely made sense. Jake went above and beyond to find the best option for our specific situation, and his dedication has truly set him apart. We will absolutely be using Jake for all future finance needs. Highly recommended

Riley Nicoll

November 29, 2025

My partner and I have just bought our first home and Jake de Ruyter helped us arrange our finance. Jake was an absolute pleasure to deal with. He made the process smooth, stress-free, and straight-forward. He displayed professionalism and open communication throughout the process and was quick to act on every piece of correspondence. We are so happy and will 100% be doing all our future finance through Jake.

Do Interest Only Home Loans Still Make Sense?

How can it help you?

What do your results mean?

UNO home loans

Try Plans by UNO

Related Articles

Tips and Tricks to Maximise Your Home Loan (Without Refinancing or Stress)

Understanding the Home Guarantee Scheme: How More Australians Can Enter the Property Market with a 5% Deposit

Understanding Binding Financial Agreements (BFAs): How They Protect Couples and Their Property

What our customers are saying