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
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.
Get Rate Drop Alerts
We'll notify you instantly when rates drop to your target.
Maximize Your Cash Flow
Get pre-qualified in 15 minutes
Or call us directly: (757) 558-2603