For typical home loan repayments, there are two parts of the loan. This is usually referred to as the principal and interest loan, stating the two elements in the name. The principal component is the amount that you borrow, with the interest component being how much the lender charges you on top of the amount that you owe.
However, interest-only investment loans work slightly differently. With this type of home loan, your minimum repayments will cover the interest charges for an agreed period of time. The interest only period ends on the agreed upon date, which will have been discussed beforehand so that both parties are aware of the terms. For the borrower, this means that the loan balance will not be reduced during this time as you are not making any repayments on the balance.
This is the type of home loan that may be suitable for people who are looking for a temporary way to reduce the money that they are paying out each month. You may find yourself in this position if you are attempting to manage a drop in your income that is not expected to last for an extended period. Or, if you are a property investor, this can be used in order to maximise your tax deductible.