Actually Kev there are plenty of IO loans where after the 10 year period the rate does not reset. Your interest rate is the same thus the interest component does not change. You simply start paying the amortization which is at a 30 year rate but the payment is accelerated because you are paying it over 10 years.You have not backend loaded, your rate doesn’t reset, your balance has not changed. Now don’t get me wrong, your typical IO loan of this nature will cost you maybe 3/8 more then the comparitive 30 year fixed rate where you pay the 30 year amortization over a true 30 year period. Like I said, it all depends on the individual situation.
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Once more as I said, the loans are not for everyone. However they can be useful for alot of people.
