Does capitalised interest cost more than interest-only?

No. The total interest cost over the same term is the same. The difference is timing — capitalised interest defers all payments to the end of the term.

Does capitalised interest reduce the cash I receive at settlement?

It depends on the lender. Some deduct interest from the advance (reducing net proceeds), others add it to the balance. Ask your broker which method applies.

How does capitalised interest affect my LVR?

Lenders calculate LVR on the gross loan amount including capitalised interest. Longer terms mean more capitalised interest, higher gross exposure, and higher LVR.

Can I switch from capitalised interest to interest-only during the loan?

This depends on the lender. Some facilities allow monthly interest payments partway through the term. Discuss flexibility requirements with your broker before settlement.