What
is a Fixed Rate 30 Year Interest Only Mortgage?
30 year interest only mortgagea are fixed
rate products where only the interest portion
of the monthly payment is due for a set
period of years. Sometimes these loans are
referred to as 30/10 or 30/15 year interest
only mortgages are the numbers after the
trailing slashes indicate how long the interest
only payment period is available (in this
case, either 10 or 15 years). Interest only
30 year mortgage products can and do vary
by investor so be sure to ask for details
when speaking with a lender, broker, or
bank.
Please note that 30 year interest only loan
rates are NOT displayed in the survey at
the top of this page. However, many of the
companies represented can and do offer these
products. Please reach out to them directly
for more information.
30
Year Interest Only Loan Highlights
Rates for 30 year IO loans are typically
higher than with adjustable rate interest
only mortgages and can be less risky as
your note rate will remain fixed throughout
the life of the loan. However, what makes
this product risky, is that once the interest
only period ends, the principal balance
is then owed, in full, during the remaining
years of the loan. For exmaple, let's say
you took out a 30/10 IO mortgage. And, for
the first ten years you only made interest
payments. That means at the end of the IO
period, you would only have 20 years to
pay off the principal balance (and the remaining
interest). Consumers just need to be very
aware that this adjustment is going to be
coming down the road in the future and they
should plan accordingly.
These products are not available in every
state. Be sure to ask a mortgage professional
if a 30 year interest only loan is an option
in your state.
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