For a buyer who desires lower monthly payments.

Features: The borrower pays only the interest for the first years of the loan (from 3 to 15 years, depending on the loan type) so monthly payments are initially lower than typical fully amortizing loans. As interest only fixed-rate mortgage offers the stability of a fixed interest rate over the life of the loan.

Best Choice if: Monthly payment difference during the initial years can be redirected for other uses, as well as no prepayment penalty.