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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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 |
- Why we like itRate boasts a streamlined application process, with full underwriting in as little as one business day, though average fees are higher than many competitors’.Pros
- Fully underwritten mortgage approval in as little as one day for qualified borrowers.
- Generous selection of loans, including government-backed, interest-only, jumbo and renovation.
- Advertises a HELOC that can be funded in as few as five business days.
ConsRead full review- Origination fees are on the high side, according to the latest federal data.
- HELOC requires immediate, full withdrawal of funds.
- Why we like itPNC Bank has a variety of appealing mortgage options, including jumbo loans, programs for first-time home buyers and home equity lines of credit.Pros
- Low-down-payment loan options include FHA, VA, USDA and PNC Community Loan.
- Jumbo loans available with minimum down payments of 5%.
- Customizable mortgage rates are posted online.
ConsRead full review- Average mortgage rates are on the high side, according to the latest federal data.
- In-person service is not available in every state.
- You’ll have to supply personal data or account info to get answers by phone.
- Why we like itFlagstar Bank stands out for its range of accessible loans and programs, including loans with flexible requirements and down payment grant options. Its mortgage operations were acquired by Mr. Cooper in 2024.Pros
- Conventional loan terms extend to 40 years, which is unusually flexible.
- Offers options for high-balance mortgages.
- Offers specialized mortgages for professionals, such as doctors and lawyers, starting their careers.
- Reported average time to close (20-30 days) is faster than industry standard.
ConsRead full review- The lender’s mobile app is focused on banking, not mortgages.
- Conventional fixed-rate mortgages require a 5% minimum down payment, higher than some competitors.
- Why we like itTruist stands out for its range of accessible mortgage products, including government or conventional loans with flexible credit and down payment requirements.Pros
- Offers mortgage options focused on affordability.
- Convenient online application.
- Offers a HELOC and construction loans.
ConsRead full review- HELOCs are not available in every state.
- Borrowers must reach out for customized rates.
- Why we like itWells Fargo has significant upsides and shortcomings. Sample rates are easy to view, assistance programs may apply and the lender earns solid scores in our rankings, but its consumer trust track record is rough.Pros
- Sample rates are shown for various loan products, along with the type of borrower and loan that would get them.
- Offers generous down payment and closing cost assistance programs for qualified borrowers.
- Market leader in number of jumbo loans and refinances originated, according to the latest federal data.
- Rate-and-term refinance interest rates offered are lower than average, according to the latest federal data.
ConsRead full review- Home loans business is broadly focused on existing bank customers.
- Doesn’t offer specialty home loans or equity borrowing (home equity loans or HELOC).
- Scandals and government actions have damaged consumer trust in recent years.
- Why we like itU.S. Bank stands out for online convenience and impressive mortgage options, from government-backed loans to boutique mortgages. Home improvement loans and borrower assistance are available.Pros
- Offers up to $17,500 in down payment and closing cost assistance.
- Wide variety of mortgage types.
- Experienced with construction-to-permanent and renovation loans.
ConsRead full review- Assistance programs limited to select cities and states.
- Online rate tool doesn’t customize by credit score.
- Why we like itFourLeaf Federal Credit Union offers some specialty loans, like financing for co-ops and nonwarrantable condos, and a fully online application, but no online preapproval.Pros
- Specialty loans include financing for co-ops and nonwarrantable condos.
- Offers conventional loans for manufactured homes.
- Highly rated mobile app.
ConsRead full review- Interest rates are on the high side, according to the latest federal data.
- Doesn’t offer renovation, construction or USDA loans.
- Can’t get a preapproval online.
- Why we like itNetwork Capital stands out for its wide range of mortgage offerings, including niche products like physician loans, non-QM loans, ITIN loans and mortgages for manufactured homes.Pros
- Reported average time to close is 20 days, far below the industry average.
- Products like non-QM loans and ITIN loans make borrowing more accessible.
- HELOCs offer long draw terms, up to 30 years.
ConsRead full review- The lender’s website offers limited loan details.
- HELOCs have a minimum loan amount of $50,000.
- Why we like itCrossCountry Mortgage has an impressive selection of grants and loans for first-time buyers, and customer service receives high praise, but it doesn’t post rates online or offer a mobile app.Pros
- Qualified borrowers can receive up to $6,500 in down payment assistance.
- Average time to close is 21 days, which is faster than the industry standard.
- Offers conventional loans for manufactured homes.
ConsRead full review- Doesn’t post rates online.
- No mobile app.
- Fees are on the high side, according to the latest federal data.
- Why we like itPrimeLending stands out for its wide variety of loan types, including non-QM loans and renovation and construction options, but lacks some technical features like online rates or a mobile app.Pros
- Offers closing cost assistance.
- Wide variety of loan types, including non-QM loans.
- Mortgages are available for manufactured homes, including 3D-printed houses.
ConsRead full review- Loans are not available in all states.
- Rates are not posted online.
- Does not have a mobile app.
- Why we like itLoanDepot is a large nonbank lender that offers the potential for a streamlined mortgage process and cash back, but to start an application or get a rate quote you must work with a loan officer over the phone.Pros
- Offers a variety of repayment terms for fixed-rate loans.
- Does a substantial amount of business in FHA lending.
- mello smartloan product can streamline mortgage application, appraisal and title search.
ConsRead full review- Interest rates are not available on the website.
- Origination fees are on the higher end, according to the latest federal data.
- Why we like itGuild offers a number of loans and programs that stand out, including renovation loans and home equity products. However, Guild does not have a mobile app, and interest rates aren’t published online.Pros
- Offers several programs to make homeownership more accessible.
- Offers loans for manufactured homes.
- Renovation loan options are available.
ConsRead full review- Does not publish interest rates online.
- No mortgage mobile app.
- Loans are not available in every state.
- Why we like itNew American Funding offers a large menu of loan products, as well as programs like first-time home buyer assistance, but personalized mortgage rates aren't available on its website.Pros
- Offers a wide variety of purchase and refinance mortgages, as well as unique buyer assistance programs.
- Its home equity line of credit can be used for a primary residence or second home.
ConsRead full review- Average origination fees are on the high side, according to the latest federal data.
- Personalized mortgage rates are not available on the website without providing contact information.
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
