Pros & Cons Of Interest Only Mortgages

June 25, 2014/Tip of the week

The advantage of an interest only home loan is that the monthly repayments are lower than for a normal “principal and interest” mortgage. The disadvantage is that you typically pay more in interest over the full term of the loan.
However most people who take out an interest only home loan sell the property well before the end of the loan term. Their plan is generally to keep the property just long enough to make an attractive capital gain (ie sell it for much more than they paid).
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