QandAs: Loans

What is a 7 Year Interest Only Home Loan?

Answer:
Interest only is a mortgage option that allows borrowers

to decrease their monthly payments for a specific timeframe. With this option, borrowers only pay the interest, and repayment of the principal balance is put on hold for three, five, or seven years.

A 7-year interest only mortgage loan features a seven year interest only period. During this time, monthly payments remain low and affordable. Principal payments aren’t required. However, borrowers may submit an extra payment or increase their monthly payments. The extra payments are applied toward the principal. After seven years, the mortgage reverts to repayment of principal and interest.


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