Principal and interest repayments are when you pay off a portion of the principal balance of the loan (the amount you originally borrowed) plus the interest charges with every repayment you make.
Interest only repayments are as the name suggests - you're repaying the home loan interest charges only, calculated over your loan term and charged monthly. You'll not be paying off any of the principal balance of the loan. Interest only payments apply for an initial maximum period of 5 years.
Principal and interest repayments will apply once an interest only term has matured. You'll receive plenty of notice on your maturing interest only period and what your new principal and interest repayments will be. This will give you an opportunity to review your lending facilities.