Interest-only loans are structured so the borrower only pays accrued interest on the money borrowed and does not actually begin repaying the principal amount borrowed until they sell their home or refinance.

An interest-only loan offers significant savings on monthly mortgage payments for higher-priced homes. In fact, the more expensive your house is, the more you will save. And because mortgage interest is tax deductible, your entire monthly payment can likely be written off every year. (Consult with your tax advisor.)