Interest Only Mortgages
An interest-only mortgage lets you pay only the interest for an initial period — keeping your monthly payment as low as possible while maximizing cash flow flexibility.
Benefits of Interest-Only Financing
Interest-only loans are a strategic tool for the right borrower in the right situation.
Lower monthly payments during the interest-only period
Maximum cash flow flexibility in the early years
Ability to invest the payment difference elsewhere
Can qualify for a larger loan amount
Useful for borrowers with irregular or seasonal income
Ideal for short-term ownership or investment properties
Fixed and adjustable rate interest-only options available
Principal payments can be made voluntarily during the IO period
How It Works
Understanding the two phases of an interest-only mortgage is key to using it effectively.
Interest-Only PeriodTypically 5–10 years
You pay only the interest accruing on the loan each month. Your principal balance does not decrease during this time.Amortization PeriodRemaining loan term
Payments increase to cover both principal and interest. The loan fully amortizes over the remaining term.Rate StructureFixed or adjustable
Interest-only loans can have a fixed rate for the IO period or an adjustable rate that changes periodically.Important Consideration
Because you are not paying down principal during the interest-only period, your loan balance remains the same. When the amortization period begins, your payment will increase. Make sure you plan for this payment adjustment.
Is an Interest-Only Loan Right for You?
Our loan officers will help you evaluate whether an interest-only mortgage fits your financial strategy and timeline.