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 you believe market growth will outpace what it costs you in interest, it can be more efficient to use the money you would have paid towards principal and invest that in the stock market.
After 30 years you’d still have the full principal left on the mortgage, but that’s a long enough timespan that the market should average decent returns and you should be able to sell your investments you made with the difference and pay the entire mortgage off if you wanted to.
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