An interest only mortgage is a loan, secured by real property, which requires you to only pay interest on the loan. An interest only mortgage is different than a conventional mortgage because there is principal repayment and therefore no amortization period. Since no principal payment is required, more money can be borrowed on an interest only mortgage for the same monthly payment compared to a regular mortgage that includes both a principal and interest portion.http://www.youtube.com/watch?v=X6-jJO00DMg

Interest only mortgages allow you to borrow more money for the same monthly payment compared to a conventional loan because no portion of the payment is required to pay down principal. This means that you can potentially qualify to move into a larger home than with a standard mortgage.http://www.youtube.com/watch?v=X6-jJO00DMg

When you pay down a conventional mortgage, the loan will be repaid by the end of the amortization period. However, interest only mortgages do not include principal payments, so the outstanding loan amount remains the same throughout the term of the loan. The only way to reduce the outstanding debt is to make a lump sum payment or series of payments above and beyond the standard monthly mortgage payment.http://www.youtube.com/watch?v=X6-jJO00DMg

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