Skip to main content
An official website of the United States government
(855) 411-2372
Submit a Complaint

What is an "interest-only" loan?

An interest-only mortgage is a loan with scheduled payments that require you to pay only the interest for a specified amount of time. 

The amount that you owe on the loan does not go down with each payment. Once the interest-only period ends, you may have several options:

  • Paying off the loan balance all at once
  • Refinancing the mortgage loan, if refinancing is available
  • Beginning to pay off the balance in monthly payments, which are higher than the interest-only payments

Take the next step

Buying a House

We've built tools to help you understand the mortgage process and compare options.

Visit our "Buying a House" guide

Don't see what you're looking for?

Browse related questions

Was this answer helpful to you?

Please do not share any personally identifiable information (PII), including, but not limited to: your name, address, phone number, email address, Social Security number, account information, or any other information of a sensitive nature.