Interest-Only Options
“Lower payments now. Flexibility later.”
Pay only interest for the first 5-10 years, then convert to principal + interest. Significantly lower initial payments. Available on many Non-QM products.
20%+
Min Down
680+
Min Credit
$3M
Max Loan
Down payment and credit requirements vary by loan program, credit profile, occupancy, and property type. All loans subject to credit approval and program eligibility.
Is This Loan Right for You?
This Loan is Perfect If You...
- Investor wanting maximum cash flow
- Variable income, want low required payment
- Plan to sell/refinance before I/O period ends
- Want early-year payment flexibility
- 680+ credit score
This Might NOT Be Right If...
- Want to build equity steadily from day one
- Concerned about payment increase after I/O period
- Forever home, long-term hold strategy
- Prefer predictable fixed payments
Interest-Only Options Benefits
Everything you need to know about your benefits
Lower Initial Payments
Pay only interest for 5-10 years, significantly reducing monthly costs
Cash Flow Flexibility
More money available for investments, repairs, or other expenses
Convert When Ready
Transition to P&I when your income increases
5 or 10 Year Options
Choose the interest-only period that fits your plan
Investor Friendly
Maximize rental property cash flow
Strategic Financing
Perfect for short-term holds or income growth expectations
How It Works
Your path to homeownership in just a few simple steps
Choose Your I/O Period
Select 5 or 10 years of interest-only payments
Lower Payments During I/O
Pay only interest, keeping more cash in your pocket
Optional Principal Payments
Pay down principal anytime you choose
Convert to P&I
After I/O period, loan becomes fully amortizing for remaining term
Choose Your I/O Period
Select 5 or 10 years of interest-only payments
Lower Payments During I/O
Pay only interest, keeping more cash in your pocket
Optional Principal Payments
Pay down principal anytime you choose
Convert to P&I
After I/O period, loan becomes fully amortizing for remaining term
See the Difference
Compare monthly payments on a $500,000 loan at 7%
Interest-Only
Years 1-10
Monthly Payment
$2,917/month
- Pay only interest
- 5-10 year flexibility
Principal + Interest
Full 30-year term
Monthly Payment
$3,327/month
- Pay principal + interest
- Fixed payments from day 1
$500,000
7%
$410/month
Payment Timeline
Interest-Only
Years 1-10
Principal + Interest
Years 11-30
Weighing Your Options
Understand the tradeoffs before deciding
Advantages
- Lower initial monthly payments
- More cash flow flexibility
- Good for investors
- Can pay principal when you want
Tradeoffs
- Payment increases after I/O period
- Don't build equity during I/O
- Higher rate than fully amortizing
💡 Tip: Interest-only loans work best when you have a clear exit strategy or expect your income to grow.
Interest-Only vs Traditional Loans
| Feature | Interest-Only(This loan) | Traditional |
|---|---|---|
| Income Documentation | Varies by program | Full docs |
| Min Credit Score | 680+ | 620+ |
| Down Payment | 20%+ | 3-5%+ |
| Initial Payments | Lower (I/O) | Higher (P&I) |
| Equity Building | Delayed | Immediate |
| Rate Pricing | Slightly higher | Market rates |
| Best For | Cash flow focus | Long-term ownership |
* Rates and terms subject to change. Contact us for current offers.
Frequently Asked Questions
Common questions about Interest-Only Options
Last updated:
What is an interest-only loan?
An interest-only loan allows you to pay only the interest portion for a set period (typically 5-10 years). After that, the loan converts to a standard principal + interest payment for the remaining term.
How much can I save with interest-only payments?
Savings vary based on loan amount and rate. On a $500,000 loan at 7%, you could save approximately $410/month during the I/O period compared to a fully amortizing payment.
What happens when the I/O period ends?
Your loan converts to a fully amortizing payment structure. The remaining balance is spread over the remaining term (e.g., 20 years if you had a 10-year I/O period on a 30-year loan).
- Yes! The I/O payment is the minimum required. You can pay additional principal anytime, which reduces your balance and future payments.
- Real estate investors seeking cash flow, borrowers with variable income, those planning to sell/refinance within the I/O period, or borrowers expecting significant income growth.
- Typically yes, interest-only loans carry a slightly higher rate than fully amortizing loans. The tradeoff is significantly lower required payments during the I/O period.
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