interest only payments are an increasingly popular choice to reduce monthly housing expenses. Unlike traditional mortgages, which require a borrower to make a payment to cover the interest payable on the mortgage first, and then a small amount of principal each month, interest only mortgages require the borrower to pay only the interest due each month, with the option to make payments to principal as and when the borrower feels it necessary.

Making interest only payments can be significatnly less expensive than paying a fully amortized, principal and interest payment on a traditional loan.

For example, a $500,000 mortgage @ 6% Interest Rate would have a normal, principal and interest payment of about $3,000

The same loan with an interest only option would require payments of $2,500 a month for the first 10 or 15 years, a cash flow savings of $500 a month (about 17% lower).

Interest only payments are a great way for a homebuyer to qualify for a more expensive home than they might normally be able to. Also, this is a great option for professionals or executives who may plan on relocating or upgrading within 3 years or so.

Interest only payments are a great way to increase cash flow. They are great options for investors who need to free up money so that they can use their available money elsewhere, such as repair work, buying additional properties, helping free up money when some of their rental properties sit un-rented, etc... Consult your local mortgage professional at or email them at apply now for a mortgage to find out if this may be the right type of loan for you.