From what I understand about mortgages, which isn’t a lot at all, I just don’t see any scenario where an interest only mortgage is a good idea.
You pay it off for let’s say 20 years and you still have the full balance remaining. What am I missing?
In: Economics
One other reason is if your income varies a lot from month to month. Someone who works in sales might have a fairly low base salary, but expect to get bonuses every month/quarter/whatever based on sales commission. So they would use an interest-only mortgage for the lower payments to fit their lower base salary. Then, they would use their bonuses to pay down the principal when they could.
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