Your interest-⁠only period is ending. What happens to your repayments?

Start by finding out what the new payment will be. If it leaves you short each month, look at your options before the changeover.

Start with your lender's expiry notice and latest statement. Find the changeover date, the new repayment, the rate that will apply and the years left.

If the notice leaves you guessing, call the lender. Tell them now if you don't think you can afford the new payment.

No. The usual change is to principal and interest over the term left on your contract. Principal is the money you owe. With principal and interest payments, part of each payment reduces that debt.

If your original loan was for 30 years and you spent the first 5 paying interest only, you'd normally have 25 years left to repay the balance. A term extension is a separate request, not an automatic reset.

The rate can change at the same time. Ask for the repayment on your actual balance and contract rather than assuming your old rate carries over.

Say you borrowed $500,000 over 30 years, with 5 years interest only, and still owe $500,000 when those 5 years end. For this hypothetical example, assume 6.90% during interest only, then 6.50% for principal and interest. The stress test uses 7.50% for principal and interest instead.

Even with a lower rate after interest only, the payment rises because you're now repaying the debt over 25 years. In this example, a trial would mean setting aside about $501 extra a month, or about $820 for the 7.50% stress test.

The example assumes interest only costs 0.40 percentage points more: 6.90% rather than 6.50%. These are hypothetical rates, not quoted lender pricing. Check the rates available for your loan before comparing repayments.

These figures assume monthly payments, no fees, no offset and no extra repayments. The rates are held at the stated assumptions for each repayment stage; they aren't forecasts.

Lenders usually calculate interest daily, and your new rate may differ. Try Moneysmart's interest-only mortgage calculator, then use your lender's written repayment advice for your budget.

If you have a few months before the change and can afford it, try putting the extra payment aside now. You can build an emergency reserve or keep it in an eligible offset account.

An offset is a linked account whose balance reduces the interest charged on the loan. Check your loan's rules before making extra repayments, especially if part is fixed.

Make the test realistic. Include insurance renewals, school costs, council rates and repairs. If it's an investment, allow for vacancy and maintenance. Could you cover a month without rent? Our investment property loan guide covers the finance considerations for a rental property.

Try the budget with a few bills landing together, not just in a cheap month. A short trial can help, but it won't prove the loan is affordable long term. Allow for expenses and income changes you can reasonably see coming.

If the higher payment fits and leaves a useful cash buffer, moving to principal and interest starts getting the debt down. Ask your lender to review the rate before accepting the first figure.

Send us the expiry notice and we can compare that payment with eligible extension or refinance options, including switching costs.

If you arrange your own regular transfers, check whether you need to increase them. An old transfer amount can leave you short even though money is still going into the loan.

You could ask for more time on interest only. The lender has to approve it, so be clear about what you would use that time for. You might need to clear another debt, prepare to sell or get through a known income change.

Required interest payments don't reduce the balance. Extra principal payments may do so if your loan allows them. Check the payment at the end of the proposed extension as well as the payment now.

An extension needs approval. Before the current period ends, check how much interest only you've used, the term left and what evidence the lender needs. Keep budgeting for the scheduled principal and interest payment while it decides.

At CBA, using up the owner-occupier allowance can rule out an ordinary extension; unused investment allowance still needs approval. Send the statement and expiry notice so we can check the actual facility before comparing alternatives.

The useful comparison is your existing loan moving to principal and interest, an approved extension if available, and a refinance. Use the same balance and remaining term first. Then show any longer-term option separately so the cost of stretching the debt is clear.

Get a free loan review with Hunter Galloway before your interest-only period ends. Send your expiry notice and latest statement so we can check the dates, lender rules and repayments with you. If you are already struggling to pay, contact the lender's hardship team now rather than waiting for refinance.

You could also refinance. Ask for the comparison over the years you have left first. Restarting at 30 years may cut the monthly payment because you're taking longer to repay the debt, even without a cheaper rate.

Get both figures: keeping your remaining term and extending it, with switching costs included. The longer loan may cost more in total interest. Either way, the new lender still needs to approve you.

Our refinance guide explains the costs to compare. The mortgage calculator gives an initial borrowing-capacity estimate, not your new repayment or confirmation of approval. If you're also thinking about moving, our guide to upgrading your home covers the wider buying-and-selling decision.

Call your lender before it becomes a missed payment. Explain the shortfall and ask about hardship assistance. Bring a simple budget showing income, essential spending, other debt payments and what you can realistically pay. For a rental property, use the rent left after property costs.

Don't count on an extension or refinance being approved in time. If the loan stays unaffordable, talk to a financial counsellor or legal adviser about a planned sale, allowing for selling costs, any debt left and where you'd live. Moneysmart's mortgage help explains where to start.