13 Best Interest-Only Mortgage Lenders of 2025
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.
Last updated on January 30, 2025
Written by
Edited by
Managing EditorFact Checked
Fact Checked
Written by
Edited by
Managing EditorFact Checked
Fact Checked
Many or all of the products on this page are from partners who compensate us when you click to or take an action on their website, but this does not influence our evaluations or ratings. Our opinions are our own.
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
Why trust NerdWallet
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.
Why trust NerdWallet
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 2025
Have you or your spouse served in the military?
We’ve got more home loan options for you. Show me
Lender | NerdWallet Rating | Min. credit score | Min. down payment | Learn more |
|---|---|---|---|---|
620 | 3% | |||
620 | 3% | |||
600 | 3% | |||
620 | 3% | |||
620 | 3% |
Rate: Best for variety of jumbo loans
Min. credit score
620
Min. down payment
3%
- Why we like itRate boasts a streamlined application process, with full underwriting in as little as one business day — though for all its online conveniences, you'll still work with a human.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 fixed-rate HELOC that can be funded in as few as five business days.
ConsRead full review- Some affordable loan options have income limits or other restrictions.
- Details of less common loan types aren't available on the lender's website.
- HELOC requires immediate, full withdrawal of funds, though there is an option to make additional draws.
PNC Bank: Best for low jumbo loan origination fees
Min. credit score
620
Min. down payment
3%
- Why we like itPNC Bank has solid options for budgets large and small. Though average interest rates are on the high side, its wide selection of loans (even for lower credit scores) could be a good pick for first-time home buyers seeking a streamlined digital experience.Pros
- Solid variety of mortgage types, both standard and harder-to-find.
- Online rate quotes are informative and easy to customize.
- Offers down payment grants and no-PMI loans for low-income borrowers.
ConsRead full review- Some of the highest average interest rates of all lenders we review.
- HELOC and construction/lot loans not available in all states.
- In-person service not available in all states.
Flagstar: Best for customer experience
Min. credit score
600
Min. down payment
3%
- Why we like itFlagstar Bank stands out for having a wide variety of home loan options, including harder-to-find products. But take note that Flagstar has reduced its mortgage business as part of corporate restructuring. Executives have indicated that the lender will rebuild its home lending operations by focusing on the needs of banking clients.Pros
- Offers down payment assistance programs to borrowers in qualifying areas.
- Reported average time to close is 30 days, faster than the national average.
- Conventional loan terms extend to 40 years, which is unusually flexible.
ConsRead full review- Branches are only available in nine states.
- Interest rates and fees don’t stand out among competitors.
- Sold its mortgage servicing business last year, meaning you’re likely to make payments with a different company.
Truist: Best for variety of jumbo loans
Min. credit score
620
Min. down payment
3%
- Why we like itIf you prefer people to tech, Truist might be a good fit for you. Preapproval and customer care happen mostly offline, and for details on less-common loan types or custom rates you'll need to talk to a person. Despite the human touch, customer satisfaction ratings are notably low.Pros
- Offers a wide range of mortgage options focused on affordability.
- Convenient online application.
- Generous grants for qualifying home buyers in select locations.
ConsRead full review- Getting custom rates and applying for mortgage preapproval both require human contact.
- Customer care leans heavily on phone and in-person service.
- HELOCs are not available in most states, though home loans are available everywhere in the U.S. except Alaska, Arizona and Hawaii.
Wells Fargo: Best for industry leader in jumbo loans
Min. credit score
620
Min. down payment
3%
- Why we like itWells Fargo has significantly shrunk its mortgage business in the past two years, dropping from the third largest mortgage originator in 2023 to the twelfth largest in 2024. It was still the fourth largest jumbo loan originator in the country last year.Pros
- Borrowers can see customized mortgage rate estimates for conventional and VA loans.
- Offers relatively low interest rates, according to the latest federal data.
- Discounts may be available for existing Wells Fargo customers.
- Rate-and-term refinance interest rates offered are lower than average, according to the latest federal data.
ConsRead full review- Does not offer home equity loans or HELOCs.
- Borrowers need at least $250,000 in assets with the bank to qualify for a rate discount.
- Prospective borrowers may be put off by the lender’s past legal issues.
U.S. Bank: Best for customer experience
Min. credit score
N/A
Min. down payment
N/A
- 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.
FourLeaf Federal Credit Union: Best for variety of jumbo loans
Min. credit score
620
Min. down payment
3%
- Why we like itFourLeaf Credit Union, formerly known as Bethpage, is easy to join: Just deposit $5 in a savings account. However, its online mortgage rate quote is light on details, and average rates are on the higher side.Pros
- Nice selection of specialty mortgages.
- Offers conventional loans for manufactured homes.
- Well rated mobile app.
ConsRead full review- No renovation or construction loans.
- Online rate quote is light on detail and doesn’t let you customize.
- Average interest rates are on the higher side, according to the latest federal data.
Network Capital: Best for low jumbo loan interest rates
Min. credit score
620
Min. down payment
3%
- Why we like itNetwork Capital stands out for its focus on refinancing, especially cash-out transactions — only 6% of Network Capital customers got a purchase mortgage last year. Most likely to appeal to borrowers looking to refinance their home loan.Pros
- Cash-out refinancing is an uncommon specialty, so Network Capital could appeal to that borrower.
- Offers HELOCs for homeowners who want to access their equity without refinancing.
ConsRead full review- Home buyers should know the lender doesn’t specialize in purchase loans.
- Borrowers must be contacted for a quote before completing an online application.
CrossCountry Mortgage: Best for variety of jumbo loans
Min. credit score
620
Min. down payment
3%
- Why we like itCrossCountry Mortgage stands out for its wide range of loan types, including FHA loans and less common options. Down payment assistance is available. However, the lender earns relatively low marks for customer satisfaction during origination.Pros
- Reported average time to close is 21 days, far shorter than the national average.
- Borrowers with credit scores as low as 500 may qualify for a mortgage.
- Down payment grants up to $5,250 is available for qualified first-time home buyers.
ConsRead full review- Rates aren’t posted online.
- Borrowers can’t apply online without talking to a loan officer first.
- Mobile app is not geared toward borrowers.
PrimeLending: Best for variety of jumbo loans
Min. credit score
620
Min. down payment
3%
- 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.
loanDepot: Best for low jumbo loan interest rates
Min. credit score
620
Min. down payment
3%
- Why we like itLoanDepot, one of the country’s largest mortgage lenders, has faced negative headlines recently. It offers a wide range of mortgages, including the harder-to-find FHA 203(k) renovation loan. Federal data tells us average mortgage rates are on the low side, but that’s not easy to discover: LoanDepot doesn’t post rates on its website.Pros
- Average interest rates are on the lower side, according to the latest federal data.
- Wide variety of loan types, including specialty mortgages.
- Multiple options to fund home renovations, including construction loans and equity products.
ConsRead full review- No mortgage rates posted online.
- Average origination fee is on the higher side, according to the latest federal data.
- Recent headlines have damaged consumer trust.
Guild Mortgage: Best for customer experience
Min. credit score
620
Min. down payment
3%
- Why we like itGuild Mortgage offers a wide range of products that may attract nontraditional borrowers, including loans with 0% or 1% down. However, interest rates aren’t published online, making it harder to shop around.Pros
- Offers a wide range of loans, including harder-to-find products that appeal to nontraditional borrowers.
- Borrowers can get a mortgage with 0% or 1% down.
- Borrowers can apply via mobile app.
ConsRead full review- Mortgage rates aren’t posted online.
- Origination fees are on the high side, according to the latest national data.
- Licensed in most states, but not all.
New American Funding: Best for customer experience
Min. credit score
580
Min. down payment
N/A
- 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
