No principle repayments are required - only the interest portion has to be paid on this loan. Theoretically, the loan need never be paid out as long as interest payments are being made.

Some loans can be split with an interest only portion to reduce repayments early on in the loan. Interest only works well with fixed rate loans where the ability to calculate future interest means interest can be paid in advance. This is sometimes a good option

for investors.

The interest on a loan is the tax deductible portion of your loan if you are buying an investment and fixed portion sometimes is a good option if you are paying off more then one mortgage. It is recommended that you speak to an accountant regarding the best way to work the repayments tax effectively.