Interest Only Loan 

When purchasing a home with an Interest-Only home loan, you're solely responsible for covering the interest portion of your loan with each monthly mortgage payment. This differs from traditional loans, where your monthly payments contribute to both the loan's interest costs and the principal loan balance, which represents your initial borrowing.

An Interest-Only mortgage offers the flexibility of making interest payments exclusively for a predetermined period, often ranging from 5 to 10 years. Since these payments only address the interest, the principal loan amount remains unchanged unless you choose to make extra payments towards it.

While you have the option to pay more than just the interest during this period, the loan balance remains static if you do not allocate payments towards the principal loan amount.

Interest-Only loans offer advantages for financially stable borrowers and homeowners seeking to finance a second property, particularly if they plan short-term ownership, as these loans provide lower monthly payments, the option to refinance after the interest-only period, and potential profit through property resale if home values appreciate.