What is an Interest Only Home Loan?
An interest-only home loan is a type of mortgage where the borrower pays only the interest on the loan for a specified period, typically between five to ten years. During this period, the principal amount of the loan remains unchanged, and the borrower is not required to make any payments towards the principal. This type of loan is designed to provide flexibility for borrowers who may have varying financial situations or who want to minimize their monthly payments in the short term.
Interest-only home loans can be beneficial for certain individuals, but they also come with potential risks and considerations. In this article, we will explore the features, advantages, and disadvantages of interest-only home loans, as well as provide insights into how they can impact your financial planning and home ownership journey.
