QandAs: Loans

What is a 6 Month Interest Only Mortgage?

Answer:
Homeowners who want to reduce their monthly payment

and save money can choose an interest only option. This option allows borrowers to only pay the interest for a set period.

Typical interest only periods are three, five, seven, and ten years. However, it is possible to obtain a shorter interest only period. With a 6 month interest only mortgage, borrowers do not have to make principal payments for the initial six months. This provision temporarily lowers monthly payments and borrowers can use the extra cash for other purposes. After six months, the interest only period ends and the homeowners start repayment of both interest and principal.


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