Maximum cash flow. Defined exit.
Interest-only keeps your monthly carry low during a hold or stabilization period. For investment properties with a clear plan.
Overview
Interest-only mortgages let you pay only the interest for a set period. No principal reduction. The benefit is straightforward: lower monthly payment means better cash flow on a rental property during the hold.
When the interest-only period ends, the remaining balance amortizes over the remaining term. That means a meaningful payment increase. I model the full schedule so you know exactly what's coming and when.
This product is for investors with a strategy and a timeline. Stabilize the property, build income, sell at the right time, or refinance into permanent financing. The plan exists before the loan does.
Key Details
How I Handle This
I model the complete picture. IO payments, amortizing payments after, total interest cost, projected returns at each stage. Then you decide whether the IO structure improves your investment thesis.
Questions I Get
What happens when IO ends?
Payment jumps to cover principal and interest. The increase is significant. I show the exact numbers upfront.
Can I make principal payments during IO?
Yes. Most programs allow voluntary payments.
Primary residence eligible?
Generally no. IO is primarily for investment properties through DSCR and non-QM.
Investment property with a strategy that needs flexible financing?
Send me the deal. I'll model the IO structure and compare it to fully amortizing.