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10 Best Interest-Only Mortgage Lenders of 2025
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10 Best Interest-Only Mortgage Lenders of 2025

Kate Wood
Jeanette Margle
Kate Wood
+1
Written by 

Kate Wood

,  Edited by 

Jeanette Margle

Written by 

Kate Wood

 and 
1 other
Last updated 12/16/2025
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.
 

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Best for jumbo loan volume

Rate

NMLS#2611

NerdWallet rating

4.5

Home loans overall
Min. credit score

620

Min. down payment

3%

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Our take on Rate

The Nerdy headline

Rate 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.

What we like
  • 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.
What we don't like
  • 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.
Read our full review of Rate

Best for jumbo lending overall

PNC Bank

NMLS#446303

NerdWallet rating

5.0

Home loans overall
Min. credit score

620

Min. down payment

3%

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Our take on PNC Bank

The Nerdy headline

PNC 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.

What we like
  • 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.
What we don't like
  • 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.
Read our full review of PNC Bank

Best for first-time home buyers

Flagstar

NMLS#417490

NerdWallet rating

5.0

Home loans overall
Min. credit score

600

Min. down payment

3%

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Our take on Flagstar

The Nerdy headline

Flagstar 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.

What we like
  • 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.
What we don't like
  • 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.
Read our full review of Flagstar

Best for variety of jumbo loans

AmeriSave

NMLS#1168

NerdWallet rating

4.5

Home loans overall
Min. credit score

620

Min. down payment

3%

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Our take on AmeriSave

The Nerdy headline

AmeriSave stands out for its program to lower your rate by 1% for the first year. Interest rates are on the low side, but fees are higher than competitors’. Borrowers with low credit will find flexibility here.

What we like
  • Offers a rate buydown program.
  • Average interest rates are on the low side, according to the latest federal data.
  • Accepts borrowers with credit scores as low as 500 for certain loan types.
What we don't like
  • No mobile app.
  • Average origination fees are on the high side, according to the latest federal data.
  • Getting custom rates and applying for mortgage preapproval both require contacting a loan expert.
Read our full review of AmeriSave

Best for Wells Fargo customers

Wells Fargo

NMLS#399801

NerdWallet rating

4.5

Home loans overall
Min. credit score

620

Min. down payment

3%

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Our take on Wells Fargo

The Nerdy headline

Wells 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.

What we like
  • 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.
What we don't like
  • 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.
Read our full review of Wells Fargo

Best for customer experience

U.S. Bank

NMLS#402761

NerdWallet rating

5.0

Home loans overall
Min. credit score

620

Min. down payment

3%

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Our take on U.S. Bank

The Nerdy headline

U.S. Bank offers a broad selection of mortgages, including some niche options. Rates and fees are middle of the road, per federal data. The bank offers helpful tech for rate shopping and live chat, though its online application could be smoother.

What we like
  • Wide variety of mortgages, including some harder-to-find types.
  • Experienced in construction and renovation loans.
  • Offers up to $17,500 in assistance (income/location requirements apply).
What we don't like
  • Rates shown online don’t reflect your credit score.
  • Contact form interrupts online application before you can complete it.
  • Few mortgage options for borrowers with low/bad credit.
Read our full review of U.S. Bank

Best for credit union lending

FourLeaf Federal Credit Union

NMLS#449104

NerdWallet rating

4.5

Home loans overall
Min. credit score

620

Min. down payment

3%

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Our take on FourLeaf Federal Credit Union

The Nerdy headline

FourLeaf 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.

What we like
  • Nice selection of specialty mortgages.
  • Offers conventional loans for manufactured homes.
  • Well rated mobile app.
What we don't like
  • 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.
Read our full review of FourLeaf Federal Credit Union

Best for lower-credit borrowers

Carrington

NMLS#2600

NerdWallet rating

4.5

Home loans overall
Min. credit score

620

Min. down payment

3%

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Our take on Carrington

The Nerdy headline

Carrington Mortgage offers specialty loans for people who might have trouble getting a mortgage elsewhere, like self-employed borrowers or those with heavy debt. Average rates are low, though fees are on the higher side.

What we like
  • Low average mortgage rates, according to the latest federal data.
  • Considers borrowers with bad credit, foreclosure or bankruptcy.
  • Options for self-employed borrowers and alternative income documentation.
What we don't like
  • Rates are posted online, but website navigation is clunky.
  • Average origination fee is on the higher side, according to the latest federal data.
  • Offers home equity loans, but no HELOCs.
Read our full review of Carrington

Best for jumbo lending overall

Chase

NMLS#399798

NerdWallet rating

4.5

Home loans overall
Min. credit score

620

Min. down payment

3%

GET MY RATE

Our take on Chase

The Nerdy headline

Chase mortgage has an above-average reputation for consumer satisfaction, and offers a number of programs that can make home buying more affordable and accessible.

What we like
  • Offers a wide range of loan types, including options with low down payment requirements.
  • Home buyer grants up to $5,000 may apply for qualified borrowers.
  • Receives above-average ratings for customer satisfaction, according to J.D. Power and Zillow.
What we don't like
  • Borrowers must create an account or speak with a home loan expert before completing an online application.
  • Origination fees are on the higher side, according to the latest federal data.
Read our full review of Chase

Best for first-time home buyers

New American Funding

NMLS#6606

NerdWallet rating

4.5

Home loans overall
Min. credit score

580

Min. down payment

N/A

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Our take on New American Funding

The Nerdy headline

New 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.

What we like
  • 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.
What we don't like
  • 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.
Read our full review of New American Funding
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 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 4.5 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 2024 HMDA data for origination volume, origination fee, average interest rate and share-of-product data.

What is an interest-only mortgage?

An interest-only mortgage requires payments of just the interest for the first years of the loan. You’re not paying back any of the borrowed money (the principal) yet. The interest-only period on these loans can last as long as 10 years.
Many interest-only mortgages are jumbo loans. These super-sized loans are for higher-priced properties that don't meet conventional loan standards.
Interest-only home loans are often structured similarly to adjustable-rate mortgages, with two distinct phases. During the initial phase, the interest rate is fixed — and you're only paying for the interest. Those extra-low monthly payments are arguably an interest-only loan's biggest plus.
Once that term ends, you enter the amortization phase. As with a regular ARM, now the loan's rate will begin to adjust up or down based on prevailing mortgage rates. You'll also now be on the hook for principal and interest, which can mean significantly higher payments.
Even if your interest rate moved lower, the principal payments kicking in will be a big increase. With a 10-year interest-only period, for example, you've now got just 20 years to repay the entire principal.
However, most borrowers who get this type of loan do so because they intend to pay off the loan or refinance to a different type of mortgage before the interest-only period ends. This 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. It may also be difficult to refinance if home values have dropped, since interest-only payments mean your only equity comes from your down payment.
» MORE: Best adjustable-rate mortgage lenders

Who can qualify for an interest-only mortgage?

Interest-only loans often require down payments of 15% or more and low debt-to-income ratios, as well as good-to-excellent credit scores — for example, a FICO score of 680 or higher. Lenders may also want to see evidence of substantial assets or cashflow to gauge your ability to successfully repay the loan.

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 home 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.
Other potential candidates for interest-only loans include investors looking to flip houses, people who anticipate receiving a substantial sum from an inheritance or trust, or those who are just starting out in a high-paying field. 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.
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