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An Interest-Only Mortgage may offer benefits for homebuyers looking for lower monthly payments and borrowers whose income may not be consistent during the year.

Benefits of an Interest-Only Mortgage:

  • Provides borrowers with an initial interest-only payment period.
  • Gives monthly payment flexibility during the interest-only term of the loan.
  • Payments to the principal can be included at any time.
  • Options are available to customize the loan to fit the unique needs of the borrower.

What Is an Interest-Only Mortgage?

An Interest-Only Mortgage offers borrowers the flexibility to pay only interest during the interest-only term of the loan. After the initial interest-only term ends, the monthly payment changes to include both principal and interest for the rest of the loan term.

Is an Interest-Only Mortgage Right for Me?

Interest-Only Mortgages are unique and not the right fit for every borrower. Borrowers should be aware of the following:

  • The principal balance is not reduced when you pay only interest.
  • The monthly payment will increase after the initial interest-only term ends.
  • After the interest-only term ends, the monthly payment will be higher than that of a fully amortized loan made at the same time.
  • An experienced Mortgage Loan Originator can review your loan options with you to determine which type of loan meets your financial goals.

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