An interest-only mortgage is a loan where a borrower pays only the interest on the loan for a predetermined initial period first. This is known as the “interest-only period.” You have the option of paying more monthly; however, if you only pay the amount of interest that is due, once the interest-only periods ends you will still owe the original amount you borrowed and your monthly payment will increase, even if interest rates stay the same.

While a nontraditional mortgage such as Interest-Only Mortgage loans provide flexibility for consumers, consumers may enter into these transactions without fully understanding the product terms. Please contact one of our loan specialists to answer your questions.

  • Advantages: There are relatively low payments for a specified period of time, which could be beneficial to certain consumers.
  • Disadvantages: During the interest-only period, the payments that are made don’t go towards reducing the principal loan amount. As a result, after the interest-only period, the monthly payment will increase, even if interest rates stay the same. Home equity will also be built at a slower pace because once the interest-only period ends you will still owe the original amount you borrowed.


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1st Mariner Bank - NMLS: 408251
3301 Boston Street
Baltimore, Maryland 21224
Phone: (888) 561-2265
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Certain restrictions apply. Loan approval subject to borrower qualification, completion of application and verification of homeownership. Rates and programs are subject to change without notice. Satisfaction of credit qualifications and occupancy. Loan pricing can only be locked through a home mortgage consultant. This collateral piece is provided as a convenience, does not serve as a substitute for a borrower's actual loan documents, and is not a commitment to lend. Borrowers should become fully informed by reviewing all of the loan and disclosure documentation provided. While we believe these products could be beneficial to you, there may be other mortgage products we can offer you for which you may qualify. We would also be happy to discuss those options with you. For more helpful information about residential mortgage products, please visit http://www.1stmarinerbank.com/loanoptions.