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
When interest rates are good, interest only is a much better choice. The S&P500 has averaged ~10% returns since 1928…..when interest rates were 3-4%, interest-only was a no-brainer. Nowadays it’s less clear (since you pay taxes on your market gains and in some cases can deduct part of your mortgage interest, etc).
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