Borrowers with a typical interest-only home loan face a $7000 jump in their annual mortgage costs when their interest-only period ends and they are forced to start paying back principal, the Reserve Bank says.

With almost $500 billion in interest-only mortgages set to expire in the next four years, RBA assistant governor Christopher Kent on Tuesday said the increase in repayments would be "non-trivial" for a customer with a typical $400,000 loan.

Even so, he was confident most borrowers would be able to absorb the extra cost of their loans when the interest-only period ends, and they are required to start paying back principal.

Around $500 billion worth of interest-only loans are set to expire over the next four years. Credit:Glenn Hunt

After the banking regulator last year imposed new caps on interest-only lending, analysts have highlighted the risks faced by some customers when the interest-only period on some loans expires, which typically leads to monthly mortgage payments rising by 30 to 40 per cent.