Interest only mortgages can be an excellent type of mortgage for certain people. In interest only mortgages you are obviously paying just the interest and not the principal. This will give you a much lower monthly payment which can be beneficial for those interested in saving money. You should keep in mind that with any mortgage you are paying mostly interest for the majority of the years of your mortgage. Only at the end are you paying any substantial amount of principal.

If you plan to be in a home for approximately seven years or less, it would make sense to get a low monthly payment mortgage such as interest only mortgages offer. During these years you will be able to save up a lot of money to put down on another home or for whatever your plans entail.

The interest only type mortgages are legitimate tools to obtain low monthly payments with no surprises in the fine print. You know at all times what your monthly payments are going to be. They are not going to rise, unlike adjustable mortgages which are unpredictable.

Some would say you are losing equity in the home with interest only mortgages. In essence this is not true, because you are paying so much more per month with e.g. a fixed mortgage. The extra money is buying you equity, you are not getting it for free.

Consider interest only mortgages when you are contemplating purchasing a home. If you are planning on a starter home before your family grows, interest only mortgages could be the answer.

Go back