Interest-only periods on Australian home loans usually run for one to five years. When one ends, the loan converts to principal-and-interest repayments spread over the years that remain, not the original term, so a 30-year loan that was interest-only for five years now amortises over 25. The repayment increase is often 30% to 50%, and it lands with a letter from the lender.
That letter is a refinance trigger. Investors in particular look for another interest-only period elsewhere, and a broker who has not modelled the change with the client ahead of time is not part of that decision. Conversion dates, like fixed-rate expiries, are known from settlement and belong on the review calendar.
The review conversation covers whether a further interest-only term is available and suitable, whether the higher repayment is affordable, and whether the current lender's pricing is competitive once the structure changes.