Interest-Only Home Loans

With interest-only home loans, you make interest payments only during an initial period of the loan term. 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 loan will become a fully amortizing loan based on the remaining term, and your payments will include interest and repayment of principal. This means that your interest rate and monthly payments will be lower during the interest-only period but will increase when that period is over. While you're only required to make interest payments during the initial "interest-only" period, you can choose to pay more than the interest to help lower your principal.

Consider an interest only home loan if:

• Your main income is from infrequent bonuses and/or commissions
• You’re prepared to handle an increase in payments once the  interest only  period ends
• You plan to invest the savings you receive on the difference between payment amounts on  the interest-only term and the remaining term of your loan, and you’re confident that the investment will make money
• You should be aware of the potential of substantial increased payments following the interest only period.
• To learn more about Interest-Only loans, please contact a mortgage consultant at 1-800-811-5385.