Compare interest-only payments vs fully amortizing payments to see your potential cash flow savings.
After 10 years: Your payment will adjust to approximately $4,028/month for the remaining 20 years to fully amortize the loan.
Interest-only loans are designed for sophisticated real estate investors who want to maximize cash flow, leverage capital efficiently, and build wealth through property appreciation.
Pay only interest for 5, 7, or 10 years, significantly reducing your monthly payment compared to fully amortizing loans. Free up cash for other investments or property improvements.
Keep more money in your pocket each month to reinvest in additional properties, fund renovations, or build reserves. Perfect for investors focused on portfolio growth.
Benefit from property appreciation while minimizing monthly costs. If your property appreciates 5% annually, you're building equity without paying down principal.
Lower payments mean higher cash-on-cash returns. Use the savings to acquire more properties and accelerate your wealth-building strategy.
Refinance before the IO period ends, sell the property, or transition to fully amortizing payments. You control your investment timeline.
Interest payments are typically tax-deductible for investment properties. Maximize your deductions while minimizing principal paydown in early years.
Choose the IO period that aligns with your investment strategy and timeline.
Ideal for fix-and-flip investors or those planning to sell within 5 years. Lowest rates among IO options.
Balanced option for investors who want extended cash flow benefits with moderate rate adjustment risk.
Maximum cash flow optimization for long-term investors focused on portfolio growth and property appreciation.
See how real estate investors used interest-only loans to maximize ROI and build wealth.
Outcome: Used $900/month savings to acquire 2 additional properties within 3 years. Portfolio value increased from $1.2M to $4.5M. Properties appreciated 6% annually while maintaining positive cash flow.
Cash-on-cash return: 18.5% vs 12.3% with traditional financing
Outcome: Completed renovation in 8 months, sold for $625,000. Lower monthly payments during renovation preserved capital for materials and labor. Profit: $95,000 after all costs.
Project IRR: 42% (vs 35% with traditional loan)
Outcome: Gross rental income: $9,500/month average. Lower IO payment improved cash flow by $8,640/year. Property appreciated 8% annually. Refinanced after 5 years at lower rate, extracted $150K equity for next purchase.
Annual cash flow: $42,000 vs $33,360 with traditional loan
Interest-only loans are designed for experienced investors with strong financial profiles.
Higher credit scores qualify for better rates. Scores above 720 receive the most competitive pricing.
Investment properties typically require 25-30% down. Primary residences may qualify with 20% down.
Must demonstrate liquid reserves covering 12-18 months of principal, interest, taxes, and insurance payments.
Total monthly debt payments (including new mortgage) should not exceed 43% of gross monthly income.
Available for single-family, multi-family (2-4 units), condos, and townhomes. Investment properties most common.
Loan amounts from $150,000 to $3,000,000. Jumbo IO loans available for high-value properties.
Tax returns, bank statements, profit & loss statements, and rental income documentation required.
Prior real estate investment experience is preferred but not always required. First-time investors considered with strong financials.
Important Rate Information
Rates Subject to Change: All interest rates, annual percentage rates (APRs), and loan terms displayed on this website are subject to change without notice based on market conditions and other factors.
Credit Approval Required: All loans are subject to credit approval. Not all applicants will qualify for the rates or terms shown. Your actual rate and terms will depend on your credit profile, income, assets, and other factors.
Not a Commitment to Lend: The information provided is for educational purposes only and does not constitute a loan offer or commitment to lend. Final loan approval and terms are subject to underwriting review.
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