In May, AMP Bank launched a 10-year interest-only home loan, making it the first retail bank to offer such a product to both new and existing owner-occupiers and investors[i]. Unlike typical interest-only terms of 5 years, this loan provides up to a decade of interest-only repayments without requiring a reassessment mid-term.

The loan targets a broad group of borrowers, including:

• Retirees and pre-retirees seeking flexibility as they transition into lower-income years
• Property investors and rentvesters looking for longer-term cash flow certainty
• Owner-occupiers who may need to manage variable income, such as those self-employed or semi-retired
• Self employed individuals who, because of income instability, often fail to meet the lending criteria for home loans.

This product is significant now because Australia’s financial landscape has changed. Census data from 1991, 2006, and 2021 show that homeownership for those aged between 25 and 39 has decreased in each successive generation[ii]. Meanwhile, more people are entering retirement with mortgage debt, and property equity remains a major store of wealth. AMP’s offering aims to give borrowers more time and certainty to manage their loans, especially those hesitant to sell or downsize immediately.

As for how the product works, it offers interest-only terms of 6–10 years, while owner-occupiers can borrow up to 80% loan-to-value ratio (LVR), but this reduces to 70% when interest-only repayments exceed 50% of total borrowings.

Investors can access up to 80% LVR regardless of the term. Borrowers will be assessed on their ability to repay once the interest-only term ends. Those aged 60 or over or retired must meet AMP’s exit strategy policies.

A 10-year interest-only home loan might sound unconventional, but in the right situation, Craig Betalli, Senior Broker from Our Broker says it offers real advantages—especially for investors and those nearing retirement.

Life circumstances change. One year, you earn a stable salary; the next, you’re self-employed, your partner pauses work to raise kids, or a family emergency shifts your financial footing. Having a longer interest-only period can provide critical breathing room in these moments. Without it, your loan might flip to principal and interest repayments right when your finances are stretched—potentially adding $1,000 or more per month to your repayments.

Extending the interest-only period to 10 years gives investors more predictability and control over their cash flow. Historically, a five-year window has been enough time for the value of quality, well-located properties to climb and generate equity. But with ten years, you’re better positioned to ride out market cycles and capitalise on growth—without your holding costs suddenly jumping.

Craig believes the benefits of a 10-year interest-only home loan are even more significant for those approaching retirement. If your loan flips to principal and interest just as you stop working, you might be forced to sell. A 10-year interest-only term means you can potentially hold the property deeper into retirement, maintain cash flow through your rent, and access additional years of capital growth—which could make a meaningful difference to your retirement nest egg.

Surprisingly, the 10-year interest-only home loan doesn’t cost more than a standard interest-only loan. Rates of 6.29%[iii] are in line with existing five-year interest-only products. Currently, comparable interest rates from other lenders range from 6.18% to 6.32%, meaning AMP’s product is competitively priced.

As with any financial product, a 10-year interest-only loan won’t suit everyone. To find out if it’s the right fit for your situation, speak to the experts at Our Broker. Call 1800 913 677 today.

[i] https://www.amp.com.au/about-amp/news/2025/may/AMP-Bank-launches-new-10-year-interest-only-occupier-home-loan-with-no-reassessment-

[ii] https://www.amp.com.au/about-amp/news/2025/may/AMP-Bank-launches-new-10-year-interest-only-occupier-home-loan-with-no-reassessment-

[iii] https://www.amp.com.au/home-loans/amp-interest-only