13 Best Interest-Only Mortgage Lenders of 2024
An interest-only mortgage is a niche product that can be difficult to find. See NerdWallet's picks for some of the best interest-only mortgage lenders in 2024.
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An interest-only mortgage is a niche product best suited for short-term borrowers with strong cash flow and good credit. Ideally, you plan to have the loan for only five to seven years.
Many interest-only mortgages are also jumbo loans for higher-priced properties that don't meet conventional loan standards.
NerdWallet has gathered some of the best mortgage lenders for people seeking interest-only mortgages to help you find the one that's right for your needs.
» MORE: How interest-only mortgages work
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- 50+ mortgage lenders reviewed and rated by our team of experts.
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Why trust NerdWallet
- 50+ mortgage lenders reviewed and rated by our team of experts.
- 40+ years of combined experience covering mortgages and financial topics.
- Objective, comprehensive star rating system assessing 120+ categories and 5,000+ data points.
- Governed by NerdWallet's strict guidelines for editorial integrity.
13 Best Interest-Only Mortgage Lenders of 2024
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Lender ▾ ▾ | NerdWallet Rating ▾ ▾ | Min. credit score ▾ ▾ | Min. down payment ▾ ▾ | Learn more |
|---|---|---|---|---|
620 | 3% | |||
 PNC Bank: NMLS#446303 Compare More Lenders on NerdWallet | 620 | 3% | Compare More Lenders on NerdWallet | |
 Flagstar: NMLS#417490 Compare More Lenders on NerdWallet | N/A | 5% | Compare More Lenders on NerdWallet | |
 Truist: NMLS#399803 Compare More Lenders on NerdWallet | 620 | 3% | Compare More Lenders on NerdWallet | |
 Wells Fargo: NMLS#399801 Compare More Lenders on NerdWallet | 620 | 3% | Compare More Lenders on NerdWallet |
What is an interest-only mortgage?
An interest-only mortgage requires payments of just the interest for the first several years of the loan. You’re not paying back any of the borrowed money (the principal) yet.
These home loans are usually structured as adjustable-rate mortgages and frequently have terms of up to 10 years. That means that the interest rate that you’re paying can move up or down over the course of the interest-only period, depending on market conditions. After that period ends, you’ll have to pay both principal and interest. However, most borrowers who get this type of loan do so because they intend to pay off the loan, or refinance after the interest-only period ends.
Who can qualify for an interest-only mortgage?
Compared with a typical principal-and-interest mortgage, interest-only loans often require higher down payments and lower debt-to-income ratios, as well as good-to-excellent credit scores — for example, a FICO score of 700 or higher.
Why get an interest-only mortgage?
An interest-only mortgage might be a good fit if you don't plan to live in the property for long and want to preserve the cash you'd spend on monthly principal payments for other investments. It's best if you are in a strong financial position and do not need to build equity. For example, this type of mortgage could make sense if your job requires you to temporarily transfer to a new location and the interest payments cost less than renting.
This also assumes that the property value will remain stable or increase. If home values decrease in your area when you’re ready to sell the home, you’ll have to pay the difference between the sale price and the mortgage balance.
You may also consider an interest-only mortgage if you have the money to pay off the loan, but it’s tied up in an investing tool (such as a CD or bond) that will mature before the end of the interest-only period.
More from NerdWallet
Last updated on January 30, 2025
Methodology
The star ratings on this page reflect each lender's overall star rating. Read more about how we determine those ratings.
The lenders on this page are chosen using this methodology:
NerdWallet reviewed more than 40 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (measured among lenders with at least a 1% market share), lenders with significant online search volume and those that specialize in serving various audiences across the country.
For inclusion on this roundup, lenders must earn 4 stars or above according to our home loans overall methodology and must confirm the availability of interest-only loans in NerdWallet’s annual lender survey.
NerdWallet solicits information from reviewed lenders on a recurring basis throughout the year. All lender-provided information is verified through lender websites and interviews. We also utilized 2023 HMDA data for origination volume, origination fee, average interest rate and share-of-product data.
NerdWallet's Best Interest-Only Mortgage Lenders of 2024
- Rate: Best for variety of jumbo loans
- PNC Bank: Best for low jumbo loan origination fees
- Flagstar: Best for customer experience
- Truist: Best for variety of jumbo loans
- Wells Fargo: Best for industry leader in jumbo loans
- U.S. Bank: Best for customer experience
- FourLeaf Federal Credit Union: Best for variety of jumbo loans
- Network Capital: Best for low jumbo loan interest rates
- CrossCountry Mortgage: Best for variety of jumbo loans
- PrimeLending: Best for variety of jumbo loans
- loanDepot: Best for low jumbo loan interest rates
- Guild Mortgage: Best for customer experience
- New American Funding: Best for customer experience
