For the smart investor, an interest-only home loan has several advantages over the more standard principal and interest home loan. Those advantages include:
- Lower monthly payments
- More available cash
- The ability to use the extra cash for further investment
With a standard principal and interest property financed loan, you pay a certain amount of the loan as interest every month while also paying down some of the principal (also known as the balance).
With an interest-only investment mortgage, the payment you make every month only covers interest, freeing the part that would cover the principal for further investment…