Interest Only Mortgage Loans

Starrmortgage17 Dec, 2024Finance

Interest-only mortgage loans are a type of loan where the borrower only pays the interest on the principal balance for a specified period, typically 5 to 10 years. During this interest-only period, the borrower is not required to pay down the principal. After this period ends, the loan typically converts to a standard mortgage, where both principal and interest are paid. This type of loan can offer lower monthly payments in the initial years, but it may result in higher payments later on when the principal must be paid down.