Interest-only mortgages.
Plan beyond the first payment.
For a high-value home, compare the initial payment structure with the full repayment obligation. Stonehaven helps you explore financing options for your home. An interest-only period postpones principal repayment; later payments can increase. The lender determines eligibility and available structures.
Request a consultationResidential inquiries in GA, AL, TN, FL, NC and SC. Program eligibility varies.
Reasons to explore the option
Preserve cash reserves
Compare an interest-only structure when keeping funds available matters, while maintaining a workable plan for the loan balance.
Income arrives unevenly
Business owners and professionals with variable compensation can review the payment schedule alongside their documented income and reserves.
Compare a property strategy
For a rental property, ask about investor financing and the property’s cash flow. Occupancy and loan purpose affect which programs may be available.
Review the whole loan, from the start
Tell us your goal
Share your property state, purchase or refinance goal and expected ownership timeline. A specialist will follow up by text.
Compare both payment schedules
Ask for the interest-only period, rate structure, subsequent payments and final maturity. Compare these with a loan that repays principal from the first payment.
Check the repayment plan
Review income, assets, reserves, equity and debts. Consider whether later payments remain manageable without relying on a future sale or refinance.
A lower starting payment is only part of the decision
At the same rate and balance, an interest-only payment is lower than a principal-and-interest payment because repayment of the balance is deferred. The balance does not shrink from interest payments alone. Later payments can rise substantially when principal repayment begins, and an adjustable rate can change the payment as well. A decline in property value can reduce equity. Refinancing and selling are not guaranteed exit options.
Interest-only vs. principal-and-interest payments
| Feature | Interest-only structure | Amortizing structure |
|---|---|---|
| Scheduled principal reduction | None during the interest-only period | Part of each scheduled payment repays principal |
| Payment transition | Review when principal repayment begins and whether a balloon is due | Principal is repaid over the agreed amortization schedule |
| Rate structure | May be fixed or adjustable, depending on the program | May also be fixed or adjustable |
| What to compare | Initial and later payments, remaining balance, fees and total cost | Payment schedule, remaining balance, fees and total cost |
Request the actual terms for your file. An interest-only feature does not establish the rate, loan term, minimum credit score or required down payment. It can increase total interest paid compared with repaying the same balance sooner at the same rate.
Questions before you start
What happens when the interest-only period ends?
The loan agreement controls the next step. Payments may increase to repay principal and interest over the remaining term, or a balance may be due at maturity. Confirm the full schedule and any balloon payment before proceeding.
Is interest-only the same as an adjustable-rate mortgage?
No. Interest-only describes how payments are applied. Fixed or adjustable describes the interest rate. Ask about both features, including any adjustment dates and caps.
Can I make payments toward principal?
Ask whether the program permits additional principal payments, how to direct them and whether any prepayment charge applies. Also confirm whether paying extra changes the required payment or only the outstanding balance.
Does a smaller initial payment make qualification easier?
Not necessarily. The lender applies its income, credit, asset, debt and property requirements. Qualification may consider payments beyond the initial interest-only period.
Can I use interest-only financing for an investment property?
It may be available through eligible investor programs. Ask for a DSCR or investment-property review so the property use, rent and repayment structure are evaluated under the appropriate program.
Is this a HELOC?
An interest-only payment feature is not itself a line of credit. A HELOC is a separate product with its own draw and repayment terms. If you need revolving access to equity, compare home equity options.
Further reading: Consumer Financial Protection Bureau: interest-only loans
Explore your interest-only mortgage options
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