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
If the rate’s locked in then you have WAY more stability on housing costs during those years than you would while renting.
Assuming the interest is competitive with or beats rent, which it generally will be with ever rising rents, then you would use that time to build up your down-payment to refinance into a traditional mortgage. Or sell when you need to relocate.
Also provides a way to live somewhere just for a few years when the rent market is tight or exorbitant.
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