If you can get an interest only loan at a fixed rate for a longer term (eg. 10-30 years), then why not? I never understood why anyone would lock themselves into a higher payment on a 15 year term vs a 30 year term. Yes I know the interest rate can be slightly lower, however you can always pay more toward principal each month (or one month a year – your choice) on a 30 year loan as if it were a 15 year term, but you are not bound to the higher payment each and every month. This works for an interest only loan also – there is no reason why you can’t pay more toward the principal whenever you want (provided you have the cash). You have the best of both worlds that way …
If you can get an interest only loan at a fixed rate for a longer term (eg. 10-30 years), then why not? I never understood why anyone would lock themselves into a higher payment on a 15 year term vs a 30 year term. Yes I know the interest rate can be slightly lower, however you can always pay more toward principal each month (or one month a year – your choice) on a 30 year loan as if it were a 15 year term, but you are not bound to the higher payment each and every month. This works for an interest only loan also – there is no reason why you can’t pay more toward the principal whenever you want (provided you have the cash). You have the best of both worlds that way …
