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Interest Only


Interest only loan programs provide the same features as fixed and variable rate programs, and they additionally offer a lower payment option. With an interest only loan payment option, you pay only the interest portion of the payment but no principal.

Loan Program Advantages Disadvantages
Interest Only Programs
  • Several payment options
  • Lower monthly payments
  • Qualify for a higher loan amount
  • Qualify at the interest only payment
  • Option to pay the full principal and interest payment
  • Interest only payments for up to ten years
  • Higher rates
  • Principal loan balance will not decrease during the interest only payment period
  • Payment will be higher for the remaining term

An interest only loan can be more expensive compared to a fully amortized loan. Many lenders add a fee of one-quarter point for the interest only option.

Interest only payment options allow you to qualify at the starting interest only payment. This gives you more buying power and a lower monthly payment compared to an amortized loan.

You pay interest based on your principal balance. On an interest only loan, your principal balance does not decrease, therefore, you pay more interest with this option.



Cosmopolitan Mortgage Inc. - 37 North Center Street - Orange, NJ 07050
Office Phone: (973)-673-0098 Fax: (973)-673-0086 PA Office: (724)-861-8900
Toll Free Phone: (866)-373-0909


Cosmopolitan Mortgage, Inc.

Providing FHA, Conventional & Commercial Loans

 A Correspondent Mortgage Banker licensed by the New Jersey, Pennsylvania, and Mary Land Departments of Banking 



Equal Housing Opportunity

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