An Interest Only Home Loan is just that, you only pay the interest each month on your loan without any principal reductions.  This could be an option to consider for an investment loan (investment property or shares for example) that is tax deductible and where you have other uses for your surplus funds - ie: saving for another property purchase or home renovations, etc.

Interest only periods can be up to 10 years, however each bank have their own policies and will assess the request in line with their credit criteria and based on the strength of each application.  

The benefit is that you can use your additional income for other purposes however the downfall is that you are not actually making any reductions to the loan itself.

There are times where a combination of a principal & interest loan and an interest only loan could be useful for tax strategies - for example, you could consider accelerating repayments on your owner occupied home loan and have your investment loan as interest only.  Whilst we are unable to provide you with specific tax advice, we would assist you in making these decisions based on your personal circumstances.