Best Interest Only Mortgages: An Infusion of Cash Up-Front
Best interest only mortgages offer benefits in some situations. The nature of this home loan can be shocking after the interest only portion expires. In the beginning, all payments go to the interest rate. This makes the initial repayments manageable. After a period of time, the full repayment is expected, which will be higher. Interest rates can jump at any time, so it’s important to be informed.
Opening the Door to Homeownership
Loans such as the interest only have opened the homeownership door to more individuals. Getting your foot in the door counts. That’s all that some people need. If taking on the interest only loan is cheaper than renting, you save money in the beginning. Ideally, that sets you up for future repayments as a homeowner.
Provides Cash Flow
First time home buyers aren’t the only ones who leverage this home loan in their favour. The second home buyer and investor do as well. Their goal is to take a valuable property off the market before anyone else does. Then they leverage the favourable property and loan terms to their advantage. There is risk in finagling the mortgage in this manner, but investors tend to have a backup plan. For other applicants, we encourage you to speak with our team first.
Interest Only Period Expires
The interest only period does expire. At that point, the homeowner must be ready to send larger monthly repayments. The interest that was paid gets capitalised, which adds to the principal and the monthly repayment. So, it’s important to be ready for the phases of this mortgage-type.
Best Interest Only Mortgages Conclusion
Our goal is to help our clients achieve financial success. If you believe that best interest only mortgages are a good option, we walk through the details with you. We also examine your current financial situation and come up with different scenarios. Our home loan calculator is a good starting point to consider utilising.