8 Best Interest-Only Mortgage Lenders of 2024
An interest-only mortgage is a niche product that can be difficult to find. See NerdWallet's picks for some of the best interest-only mortgage lenders in 2024.
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An interest-only mortgage can be hard to find. It is a niche product best suited for borrowers with strong cash flow, good credit and often for those looking for a short-term loan, typically from five to seven years.
Many interest-only mortgages are also jumbo loans for higher-priced properties that don't meet conventional loan standards.
NerdWallet has gathered some of the best mortgage lenders for people seeking interest-only mortgages to help you find the one that's right for your needs.
» MORE: How interest-only mortgages work
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- 50+ mortgage lenders reviewed and rated by our team of experts.
- 40+ years of combined experience covering mortgages and financial topics.
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- Governed by NerdWallet's strict guidelines for editorial integrity.
8 Best Interest-Only Mortgage Lenders of 2024
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Lender ▾ ▾ | NerdWallet Rating ▾ ▾ | Min. credit score ▾ ▾ | Min. down payment ▾ ▾ | Learn more |
|---|---|---|---|---|
 Rate: NMLS#2611 LEARN MORE on NerdWallet | 620 | 3% | LEARN MORE on NerdWallet | |
 PNC Bank: NMLS#446303 LEARN MORE on NerdWallet | 620 | 3% | LEARN MORE on NerdWallet | |
 Flagstar: NMLS#417490 LEARN MORE on NerdWallet | N/A | 5% | LEARN MORE on NerdWallet | |
 Truist: NMLS#399803 LEARN MORE on NerdWallet | 620 | 3% | LEARN MORE on NerdWallet | |
 Wells Fargo: NMLS#399801 LEARN MORE on NerdWallet | 620 | 3% | LEARN MORE on NerdWallet |
- Fully underwritten mortgage approval in as little as one day for qualified borrowers.
- Generous selection of loans, including government-backed, interest-only, jumbo and renovation.
- Advertises a HELOC that can be funded in as few as five business days.
- Origination fees are on the high side, according to the latest federal data.
- HELOC requires immediate, full withdrawal of funds.
- Low-down-payment loan options include FHA, VA, USDA and PNC Community Loan.
- Jumbo loans available with minimum down payments of 5%.
- Customizable mortgage rates are posted online.
- Average mortgage rates are on the high side, according to the latest federal data.
- In-person service is not available in every state.
- You’ll have to supply personal data or account info to get answers by phone.
- Conventional loan terms extend to 40 years, which is unusually flexible.
- Offers options for high-balance mortgages.
- Offers specialized mortgages for professionals, such as doctors and lawyers, starting their careers.
- Reported average time to close (20-30 days) is faster than industry standard.
- The lender’s mobile app is focused on banking, not mortgages.
- Conventional fixed-rate mortgages require a 5% minimum down payment, higher than some competitors.
- Offers mortgage options focused on affordability.
- Convenient online application.
- Offers a HELOC and construction loans.
- HELOCs are not available in every state.
- Borrowers must reach out for customized rates.
Wells Fargo: NMLS#399801
620
3%
- Sample rates are shown for various loan products, along with the type of borrower and loan that would get them.
- Offers generous down payment and closing cost assistance programs for qualified borrowers.
- Market leader in number of jumbo loans and refinances originated, according to the latest federal data.
- Rate-and-term refinance interest rates offered are lower than average, according to the latest federal data.
- Home loans business is broadly focused on existing bank customers.
- Doesn’t offer specialty home loans or equity borrowing (home equity loans or HELOC).
- Scandals and government actions have damaged consumer trust in recent years.
Bank of America: NMLS#399802
660
5%
National
- Interest rates are lower than most lenders, according to the latest federal data.
- Offers up to $10,000 in down payment assistance to qualified borrowers.
- Banking customers can get discounted interest rates or fees.
- Mortgage origination fees are on the high side, according to the latest federal data.
- Rate estimator tool doesn’t personalize by credit score.
- Fined $12 million for reporting inaccurate mortgage applicant info to the federal government.
Bethpage Federal Credit Union: NMLS#449104
620
3%
- Specialty loans include financing for co-ops and nonwarrantable condos.
- Offers conventional loans for manufactured homes.
- Highly rated mobile app.
- Interest rates are on the high side, according to the latest federal data.
- Doesn’t offer renovation, construction or USDA loans.
- Can’t get a preapproval online.
Network Capital: NMLS#11712
620
3%
- Reported average time to close is 20 days, far below the industry average.
- Products like non-QM loans and ITIN loans make borrowing more accessible.
- HELOCs offer long draw terms, up to 30 years.
- The lender’s website offers limited loan details.
- HELOCs have a minimum loan amount of $50,000.
What is an interest-only mortgage?
An interest-only mortgage requires payments just of the interest — the "cost of money" — that a lender charges. You’re not paying back any of the borrowed money (the principal). That means you're not building equity in the house outside of your down payment or any gain in value that may occur due to local market circumstances.
These home loans are usually structured as adjustable-rate mortgages and frequently have terms of up to 10 years. After that, you’ll have to make amortized payments that are split between interest charges and principal reduction, or pay off the loan, or refinance.
Who can qualify for an interest-only mortgage?
Compared with a typical principal-and-interest mortgage, interest-only loans often require higher down payments and lower debt-to-income ratios, as well as good-to-excellent credit scores — for example, a FICO score of 700 or higher.
When would you use an interest-only mortgage?
An interest-only mortgage might be a good fit if you don't plan to live in the property for long and want to preserve the cash you'd spend on monthly payments for other investments. It's best if you are in a strong financial position and do not need to build equity.
More from NerdWallet
Last updated on January 30, 2024
Methodology
The star ratings on this page reflect each lender's overall star rating. Read more about how we determine those ratings.
The lenders on this page are chosen using this methodology:
NerdWallet reviewed more than 50 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (measured among lenders with at least a 1% market share), lenders with significant online search volume and those that specialize in serving various audiences across the country.
For inclusion on this roundup, lenders must earn 4 stars or above according to our home loans overall methodology and must confirm the availability of interest-only loans in NerdWallet’s annual lender survey.
NerdWallet solicits information from reviewed lenders on a recurring basis throughout the year. All lender-provided information is verified through lender websites and interviews. We also utilized 2022 HMDA data for origination volume, origination fee, average interest rate and share-of-product data.
NerdWallet's Best Interest-Only Mortgage Lenders of 2024
- Rate: Best for easy-to-browse interest-only option
- PNC Bank: Best for jumbo lending overall
- Flagstar: Best for jumbo loan variety
- Truist: Best for jumbo loan specialization
- Wells Fargo: Best for jumbo loan specialization
- Bank of America: Best for easy-to-browse interest-only option
- Bethpage Federal Credit Union: Best for credit union lending
- Network Capital: Best for streamlined closing
