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How Interest Only Mortgages Work

How Interest Only Mortgages Work

Michael Jensen, Mortgage and Finance Guru
By , Mortgage and Finance Guru
Edited by Harry Jensen
About the author
Michael Jensen, Mortgage and Finance Guru

Michael is the co-founder of FREEandCLEAR. Michael possesses extensive knowledge about mortgages and finance and has been writing about mortgages for nearly a decade. His work has been featured in leading national and industry publications. More about Michael

Monthly Mortgage Payment
  • Fixed Rate Mortgage
  • 7/1 Interest Only ARM
$2,400 $2,000 $1,600 $1,200 $800 $400

Interest Only Period

Interest Rate: 3.000% Monthly Payment: $950

Fixed Rate Mortgage

Interest Rate: 4.000% Monthly Payment: $1,814

Adjustable Rate Period

Interest Rate: 4.000% Monthly Payment: $2,108

Total Interest Expense

Interest Only ARM: $281,608 Fixed Rate Mortgage: $273,040
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