Interest-Only Mortgage Loans

With an interest-only mortgage loan, you pay only the interest for a fixed term. After the end of that term, you may either refinance, pay the balance in a lump sum, or begin paying the principal with an increased monthly payment.

Interest-only loan programs provide the same features as fixed and variable rate programs, and they additionally offer a lower payment option.

Interest-only loans may be advantageous to certain kinds of investors with potential increases in future earnings. Contact your Bentley Home Mortgage Consultant to learn more about this unique mortgage program.

Loan Program Advantages Disadvantages
Interest Only Programs

Several payment options

Lower monthly payments during interest-only period

Qualify for a higher loan amount

Qualify at the interest only payment

Option to pay the full principal and interest payment

Interest only payments for up to 10 years

Higher rates

Principal loan balance will not decrease during the interest only payment period

Payment will be higher for the remaining term

An interest only loan can be more expensive compared to a fully amortized loan. Many lenders add a fee of one-quarter point for the interest only option.

Interest only payment options allow you to qualify at the starting interest only payment. This gives you more buying power and a lower monthly payment compared to an amortized loan.

You pay interest based on your principal balance. On an interest only loan, your principal balance does not decrease, therefore, you pay more interest with this option.

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