Interest Only Mortgages

An interest-only mortgage allows borrowers to make payments toward interest only for a specified period of time. Because principal is not included in the required payment during the interest-only period, monthly payments may be lower initially. Once that period ends, payments typically increase as principal repayment begins.

Who May Benefit from an Interest Only Mortgage?

• Borrowers seeking lower required payments during the initial interest-only period
• Borrowers with variable or non-traditional income
• Borrowers who understand and are prepared for potential payment increases after the interest-only period ends

What Should You Consider?

Interest-only mortgages do not reduce the principal balance through the required interest-only payments. When the interest-only period ends, monthly payments may increase as the remaining principal is repaid over the remaining loan term.

Terms and qualification requirements can vary by loan program, so it is important to understand how the loan works and how payments may change over time.

Is an Interest Only Mortgage Right for You?

 An interest-only mortgage may offer flexibility for certain borrowers, but it is important to consider both the initial payment structure and future payment obligations. Our loan officers can help you understand available options and determine whether an interest-only mortgage may fit your needs and financial goals.  

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