Over the term of the interest-only loan, which are typically between one and five years, the principal – or amount owed – is unchanged.

Many of the loans coming up for renegotiation over the next three years were approved when scrutiny of a lenders' motives and capacity to repay were considered less important than lenders' building market share, according to analysts.

Loans that will fail tighter lending criteria being imposed by securities and prudential regulators will rise from rise from about $7.5 billion this year to more than $21 billion in 2020. It will fall back to about $15 billion the following year.

The number of interest-only investor loans up for renewal will be more than 10-times the owner-occupier by 2020.

Lenders have been tightening borrower terms or interest-only loans for the past 12 months in response to stricter prudential controls imposed by the Australian Prudential Regulation Authority.

It follows warnings from the Reserve Bank of Australia about record levels of household debt increasing households' financial vulnerability to a change in personal circumstances or sharp economic correction.

Fewer than half of current borrowers have plans about how to repay the principle, according to regulatory research.

In addition, investment bank UBS alleges 'liar borrowers' overstated their capacity to repay in expectation that strong rental demand and rising capital values would enable them to meet the higher repayments when the loan became due for renegotiation.

Stagnant wage growth, falling rental income and rising costs will also increase pressure on a large number of investors who own multiple investment properties, many on fixed terms.

For example, about 12 per cent of residential property investors have six more more property holdings, according to recent research by global investment bank Citigroup Global Markets.

Stressed households facing higher repayments will either have to tighten budgets, increase income by raising rents, default or sell, which could risk losing money in struggling markets outside of property hotspots' Melbourne, Sydney and, to a lesser extent, Brisbane.