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If your loan includes a prepayment penalty, be aware of the penalty you would have to pay. Or that you can invest the money better elsewhere than paying down your principal, youre building equity in your home. What are the hazards you should watch out . Let your home pay you with a Reverse Mortgage. This payment, if continued with the same interest rate, will pay off the loan at maturity. Most interestonly loans are adjustable rate mortgages ARMs, and ARMs have lower rates than FRMs because they are ARMs, not because they are IO. In the short term, this will cause a cash flow strain, but the IO mortgage gives them. If you put it in the bank, you may earn 2 .

The interestonly period is the period during which you are allowed to pay interest only, usually 5 or 10 years. Is principal, which go to reduce the balance. Experience and Service have made us Americas 1 online lender. Your payments may not cover all of the interest owed. Mortgage is interest only if the monthly payment does not include any repayment of principal. Ask the lender if you can get a loan without a prepayment penalty, and what that loan would cost. For example, second homes, or properties bought for letting to others. What information do you need to assess an IO mortgage. First years minimum payment based on initial interest rate. Historic Low Refi loan rates from top lenders.

The reason is that, after any period has elapsed, the loan with the IO option have lower rates than fixedrate mortgages FRMs. Ask lenders or brokers about the details of their loans and about the different loan options they offer. I dont recommend it as a wealthbuilding strategy for most borrowers. Keep in mind that payment caps do not apply when your loan is recalculated at the normal recalculation period. The principal you owe on your mortgage.