Since you have a shorter time to pay off the full principal (e.g., 20 years instead of 30), your new monthly payments will be much higher than those of a standard 30-year fixed loan.
: For the first few years, your payments cover only the interest charges. Your loan balance remains unchanged unless you choose to make voluntary principal payments. interest loan mortgage
: Some interest-only loans require a balloon payment at the end of the term, where the entire remaining principal is due at once. Advantages Interest-Only Mortgage: Pros & Cons | Chase.com Since you have a shorter time to pay
: Most of these loans are structured as adjustable-rate mortgages (ARMs) . This means your interest rate—and thus your payment—can fluctuate based on market conditions after the initial fixed-rate period ends. : Some interest-only loans require a balloon payment