iscover
iscover 
AMP Bank has launched a new 10-year interest-only home loan, becoming the first retail bank in Australia to offer such a product to both new and existing owner-occupiers.
The loan provides long-term financial flexibility without requiring reassessment midway through the term, a move aimed at supporting a wide range of borrowers, including retirees, pre-retirees, investors, and owner-occupiers.
The bank said the product addresses the evolving financial realities of Australians, especially those approaching or in retirement, who are increasingly carrying mortgage debt into later life.
“In the past 20 years, the number of Australians aged 55 to 64 who own their homes outright has significantly decreased. Consequently, more people are carrying debt into retirement – a trend set to continue,” said Michael Christofides, director of lending and everyday banking at AMP Bank.
“While paying off a mortgage early is often advisable, maintaining flexibility and unlocking property equity can be beneficial, especially in the early years of retirement when many underspend out of fear of outliving their savings.
“For some retirees, the reality is that increasing equity in their property offers no felt benefit; instead, they could use additional cashflow to enhance their quality of life.
“Our new interest-only loan is a simple solution designed to provide this optionality and financial flexibility for retirees and pre-retirees.”
The product features an interest-only term of up to 10 years, providing long-term cash flow support without the need for a midterm credit reassessment. Eligibility is broad, encompassing self-employed individuals, rentvestors, and those with non-traditional income sources.
Designed to support both older Australians and younger buyers, the loan offers pathways to remain in the family home or enter the property market through alternative strategies. It also simplifies administration, reducing paperwork, and reassessment requirements.
This launch responds to key demographic shifts. Home ownership among Australians aged 25–39 has declined with each generation since 1991. Meanwhile, nine in 10 Australians over 50 expect to still be paying a mortgage during retirement.
Four in five Australians aged 65 and above are unwilling to downsize to pass on wealth to children, but nearly half of those over 50 would consider releasing home equity if they could stay in their home.
Further highlighting the issue, 90 per cent of intergenerational wealth is transferred through inheritance, indicating a hesitancy among retirees to spend during their lifetimes.
The new loan offers up to 80 per cent loan-to-value ratio (LVR) for interest-only products. However, where owner-occupied interest-only terms of six to 10 years are requested and interest-only repayments exceed 50 per cent of total borrowing, the LVR is capped at 70 per cent.
Investment interest-only loans maintain a maximum LVR of 80 per cent regardless of term.
Borrowers will be assessed on their ability to service the loan once the interest-only period ends and those aged 60 or over or already retired must meet the bank’s exit strategy policy.
[RELATED: AMP partnership offers ‘fully digital bank guarantees’]
