10 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 December 16, 2025
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Head of Content, Home LoansFact Checked
Fact Checked
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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 jumbo loans. These super-sized loans are 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
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.
10 Best Interest-Only Mortgage Lenders of 2025
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Lender | NerdWallet Rating | Min. credit score | Min. down payment | Learn more |
|---|---|---|---|---|
620 | 3% | |||
620 | 3% | |||
600 | 3% | |||
620 | 3% | |||
620 | 3% |
Rate: Best for jumbo loan volume
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 jumbo lending overall
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 first-time home buyers
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.
AmeriSave: Best for variety of jumbo loans
Min. credit score
620
Min. down payment
3%
- Why we like itAmeriSave 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.Pros
- 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.
ConsRead full review- 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.
Wells Fargo: Best for Wells Fargo customers
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
620
Min. down payment
3%
- Why we like itU.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.Pros
- 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).
ConsRead full review- 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.
FourLeaf Federal Credit Union: Best for credit union lending
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.
Carrington: Best for lower-credit borrowers
Min. credit score
620
Min. down payment
3%
- Why we like itCarrington 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.Pros
- 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.
ConsRead full review- 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.
Chase: Best for jumbo lending overall
Min. credit score
620
Min. down payment
3%
- Why we like itChase mortgage has an above-average reputation for consumer satisfaction, and offers a number of programs that can make home buying more affordable and accessible.Pros
- 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.
ConsRead full review- 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.
New American Funding: Best for first-time home buyers
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 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.
These 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.
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.
More from NerdWallet
Last updated on December 16, 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 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.
