Interest Only Loans
With these loans you only make interest payments during an initial period of the loan term (usually five to 10 years). During the initial "interest only" period, your payment will not include any repayment of principal. So, the loan balance remains unchanged. Once the initial term expires, the interest only loan will become a fully amortizing loan based on the remaining term, and you're payments will include interest and repayment of principal.
While you're only required to make only interest payments during the initial "interest only" loan period, you can choose to pay more than the interest to help lower your principal.
We offer an interest only loan option on our 30-year fixed mortgage and our 3/1, 5/1, 7/1 and 10/1 adjustable rate mortgages. Keep in mind that interest only adjustable rate mortgage loans are subject to periodical rate adjustments, once the introductory period ends.
Consider an interest only loan if:
- Your main income is from infrequent bonuses and/or commissions
- You're prepared to handle an increase in payments once the introductory period ends
- You plan to invest the savings you receive on the difference between the interest only loan term and the remaining term of your loan, and you're confident that the investment will make money
Additional Loan Products