Interest only repayments on your loan are a useful tool to temporarily reduce the actual dollar amount of your repayments for an agreed period of time.
This can be good for a short term requirement where there is a temporary reduction in income or increase in expenses (such as paying rent while you are building a new home, for bridging finance, or for starting a family). Interest only repayments can also be used as a part of a wealth creation strategy with your financial advisor where excess income is first directed to non tax deductible debt.
Be aware though that interest rates are normally higher, and that when the interest only period has expired the resulting Principle plus Interest repayments are also going to be higher as the loan has to be then paid over a shorter term.
You may also like to check these calculators:
Basic loan repayments (Principle plus interest)