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Principal and interest home loans

Pay down your loan and build your future.

What is a principal and interest home loan?

A principal and interest home loan is the standard repayment structure for most home loans. This repayment structure can help you pay down your loan faster than if you chose an interest-only home loan, and it can support you in building equity over time, alongside movements in the property market.

Why choose a principal and interest home loan?

  • Pay down the balance and interest
  • Pay off your home loan faster
  • Own your own home outright sooner

Is a principal and interest loan right for you?

Your repayments for a principal and interest loan are higher than if you have an interest-only loan, but you also pay down the loan faster with this type of loan, which enables you to own your home outright sooner.

What you need to consider

If at some point you find you need to switch to an interest-only loan, you can speak to us. Changing to an interest-only loan will depend on your lender’s criteria and proof of your financial situation.

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Our home loan property usage options

Owner-occupied

With an owner-occupied home loan, you're buying a property to live in. It’s simply the difference between whether you’re living in the property or not. If it’s your current residence, it’s considered owner-occupied. These loans typically have lower interest rates than investment loans.

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Investment

With an investment home loan, you're buying a property to generate income, either through rent or capital gains, while living elsewhere. How the property is used determines the type of loan you need. Investment loans usually come with higher interest rates than owner-occupied loans.

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Interest rate type

Variable rate

With a variable rate loan, your repayments can change during the life of your loan as interest rates can change for various reasons. Sometimes you’ll pay more, and sometimes less depending on the direction of an interest rate change. Always do your research about whether a variable or fixed rate loan works best for you.

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Fixed rate

With a fixed rate home loan, you will know exactly what your repayments will be for a fixed period of time. We offer fixed rates for periods of 1 to 5 years. Your fixed rate will change to a variable rate at the end of the fixed term, unless you advise the bank you want to ‘re-fix’ your loan before the fixed term ends.

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Home loan calculators

Simple and easy to use, our home loan calculators can help you estimate repayments, how much you can borrow, and what you could save if you refinance. But remember, the results are just a guide to help get you started on your journey.

Borrowing calculator

How much can I borrow?

Find out how much you could borrow to get started on your online home loan journey.

Calculate

Refinance calculator

Looking to refinance a home loan?

Find out how much you could save by switching to an NRMA Home Loan.

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Repayments calculator

Want to calculate your potential mortgage repayments?

Find out your repayment options, rates and schedule on your loan amount.

Calculate

Principal & interest FAQs

View all FAQs

You reduce your loan balance over time, which can help you pay less interest overall compared to interest-only repayments. This approach also helps you stay on track to repay your loan within the agreed term.

Possibly, depending on your lender’s criteria and your financial situation. You may need to meet eligibility requirements and provide updated financial information.

Yes. Most principal and interest loans allow extra repayments without penalty, which can assist you in paying off your loan faster.

Most principal and interest loans include redraw and the ability to add an offset feature, which can help you manage your finances and reduce interest costs over the term of the loan. Offset Account1  benefits are only available with NRMA Home Loans if you choose an Offset Home Loan.

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    Refinancing your home loan

    Thinking about switching lenders? We’re here to help you understand where to begin and what’s involved.

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Need help?

Get support and answers to your home loan questions.

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Ready to get started?

Apply now or continue your NRMA Home Loan application.

Things you should know

Bendigo and Adelaide Bank Limited (ABN 11 068 049 178, AFSL and Australian Credit Licence 237879) (“Bendigo Bank”) is the credit provider. Credit services are provided by Tiimely Pty Ltd (ABN 41 605 696 544 and Australian Credit Licence 496431) (“Tiimely”). Insurance Australia Limited trading as NRMA Insurance (ABN 11 000 016 722) (“IAL”) is a member of AFCA and does not hold an Australian Credit Licence. IAL may receive a commission from Bendigo and pay a commission to Tiimely if your loan application is approved.

NRMA Home Loans is brought to you by Insurance Australia Limited ABN 11 000 016 722, trading as NRMA Insurance, which is a separate and independent company from National Roads and Motorists' Association Limited ABN 77 000 010 506, trading as NRMA. NRMA provides Membership, the “My NRMA” app and other services.
 

  1. Terms and conditions, fees and charges apply. All information is subject to change without notice. Full details available on application. Lending criteria apply. The Offset Account is available on the Offset Home Loan only for both fixed and variable products and must be linked to an eligible Home Loan account. The Offset Account product can only be linked to one eligible Home Loan account at any one time. Linked offset facility must be in the name of the customer name/number. Insurance Australia Limited is a member of AFCA. If you have a complaint about the home loan or offset account please refer to www.nrma.com.au/home-loans/complaints. Other fees and charges may apply and can be found at the Rates & Fees page. This is general advice only and does not take into account your individual objectives, financial situation or needs (“your personal circumstances”). Before using this advice to decide whether the Offset Account product is right for you, please consider your personal circumstances and read the Offset Account Terms and Conditions to determine if this product is right for you. The Offset Account Terms and Conditions and Offset Account TMD are available from this website.