In a mortgage, when principal payment is not required for a certain period of time, it is classified as interest-only. The only payment that is due every month is the interest that has accrued on the mortgage balance. The interest-only period varies but a common one is 10 years. In the case of a 30 year fixed rate mortgage with a 10 year interest-only period, you will pay just interest for the first 10 years of the loan. For the remaining 20 years you will pay principal and interest. Contact us to find out if an interest-only mortgage is right for you.
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