Interest only mortgages are mortgages wherein the borrower only pays off the interest and not always the principal.

Interest only mortgages are convenient for borrowers who do not have a large sum of money to begin with. This is because of the fact that interest only mortgages do not require the borrower to pay off the principal for the duration of the mortgage. Instead, the borrower is required to pay off only the interest for the whole duration of the mortgage.

The good thing is that the borrower can opt to pay off the principal as well, if he has the means to do so.

See also

• Advantages of interest only mortgages
• Disadvantages of interest only mortgages

Posted by admin on January 28th, 2008
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