What is P&I?
Principal and Interest is the repayment structure where each instalment covers both interest and a portion of the principal — progressively reducing the loan balance. The standard structure for owner-occupier loans.
Why it matters for you
Over a 30-year P&I loan, roughly the first 10 years are interest-heavy, the last 10 are principal-heavy. Extra repayments early have outsized impact on total interest cost. Compare your P&I vs IO options carefully — not every loan benefits from IO.
Last updated: April 2026