Not sure why everyone has conveniently overlooked the fact that most people don’t own a home for 30 years or even for 10 years. If I buy a home and can earn a better return then the mortgage then why wouldn’t I get an interest only loan. I know many sharp people who get the IO loan and get better returns on the saved capital.
I don’t think IO loans are for everybody. I am not a fan of deferring interest, teaser rates, or backend loading. I am a fan of maximizing returns on capital investment, leverage if it is done properly, and analyzing your own situation to see what is best for you. My standard recommendation to the “average” couple buying a home THAT PLANS TO STAY FOR A LONG TIME > 10 years would be to grab a standard 30 year amortization period fixed rate loan. However, for people who know they will relocate in several years, or for professionals who are very confident that they will earn a better return on an investment rather then paying the principal then I let them run as they please.
