Can I Have a 5- and 10-year Interest Only Loan?
Lenders offer interest-only mortgage loans in 5- and 10-year increments. This home loan option benefits the homebuyer who requires extra time to put their finances in order. If you purchase a fixer-upper, the money you don’t pay during those first five to 10 years allows you to invest in the property.
The interest-only option is still a 30-year mortgage. The difference is that monthly repayments are lower during the first five to 10 years. The payments during this period pay off the interest accrued only. When the interest-only period expires, the payments balloon up to the full mortgage amount. Ideally, the homeowner solidified their financial position and is ready to send their full monthly repayments.
An interest-only loan is available in a 5-year period or 10-year period. The most common of the two is the 5-year period. If an applicant wants to stretch it out to ten years, it’s possible. Keep in mind that the longer interest period does make the loan more expensive.
To see the effects of an interest-only mortgage, check out our home loan interest rates information with no strings attached.
Some homebuyers shy away from this option because it doesn’t help the property build equity. Our loan specialists go over these details with you before getting started on the application. This may be the best product for your financial situation, or it could be another.
Interest Only Mortgage Conclusion
Interest-only mortgages consist of several benefits for some homebuyers. This is also a viable option for investors. For more information, contact our loan specialist team at Mortgage House.