Lending a Hand: Many benefits of interest-only mortgages
There has been way too much negative press over mortgages that have the option to pay just the interest each month. In the first place, the very term “interest-only” is a misnomer. The implication is that such borrowers can only pay the interest that is due each month when in fact they can pay whatever amount they want as long as at least the interest on the principal is paid.
For example, if we take a $500,000 mortgage at a rate of 7 percent, the monthly interest payment would be the annual interest — $35,000 — divided by 12 for a total of $2,917 per month.