5 Year Interest Only Loan Programs

Colorful contemporary home.If you are researching home financing solutions, you’ve come to the right place to kick off your homework. We provide a platform where consumers can find lenders and brokers who offer a wide selection of mortgage products with a variety of index, cap, and margin choices. A mortgage professional should be able to help you navigate through the options to find the right choice for your needs.

Nice House

Learn about some of the pros and cons of buying or refinancing a home with a 5 year interest only loan and find some helpful questions to ask your mortgage professional.

5 year interest only loans can be a great fit for borrowers who are looking for short term stability from interest rate risk while keeping the monthly payments to a minimum. With these programs, borrowers can often make additional principal payments each month if they wish to pay down their balance, or opt to just pay the minimum interest-only payment. This feature affords customers the opportunity to better control how they use their finances on a month-to-month basis. Terms and conditions can and do vary by investor. Be sure to ask each company you speak with about the guidelines for their offerings.

Choosing A 5/1 IO ARM

When it comes to choosing the right 5 year interest only mortgage program, you are going to want to discuss items such as the following with your mortgage professional:

  • What are the loan’s caps and margin, and what index is the loan based upon? How may these variables impact me?
  • What is the loan’s APR? Adjustable rate mortgage APRs can be misleading because they are based upon a hypothetical scenario. Some mortgage companies may use a best case scenario (i.e. your rate staying the same or even improving after the first five years) while others opt to base their APRs on the worst case (i.e. loan adjusting to the maximum amount after the first five years and remaining at that rate for the next twenty-five years). You should just make sure that you are comparing apples to apples. It is impossible to compare APRs without the competing companies using the same set of criteria.
  • What will happen to your payments after the first five years? Your loan professional should help you to determine what your payments may look like after the interest only period ends and the loan is re-amortized for the remaining twenty-five year period (paying both principal and interest).

View Today’s Mortgage Rates – Check Pricing from Competing Lenders and Brokers

1. Select the 5/1 IO ARM from the product menu and then call the numbers in the survey and speak with a representative of each company.
2. You can click through the the companies’ web sites for additional information on their products and services.

Occupancy & Types of Properties: The residential mortgage lenders who offer 5 year interest only mortgages typically will lend on primary residences, second homes and investment homes. Properties maybe single family homes, modular homes, townhouses, condos and 2-4 unit multi-family homes. Call some of the mortgage companies featured in the rate table for more information on their products and services.

Research other interest only mortgage programs: