An interest only home loan is another option which becomes available when purchasing properties for investment purposes.
The interest payable on an investment property loan is tax deductible whilst any principal paid off is not. For many investors, they seek to maximise the tax deductible portion of their loan whilst minimising the overall repayments.
One method of this is through interest only loans. The downside to an interest only mortgage, however, is that the principal is not reduced over time. Interest only loans are reliant on growth in the property value to obtain a return.