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.

Last updated on January 30, 2024
Written by 
NerdWallet
Johanna Arnone
Edited by 
Johanna Arnone
Assigning Editor
Fact Checked
NerdWallet
Written by 
Johanna Arnone
Edited by 
Johanna Arnone
Assigning Editor
Fact Checked

Some or all of the mortgage lenders featured on our site are advertising partners of NerdWallet, but this does not influence our evaluations, lender star ratings or the order in which lenders are listed on the page. Our opinions are our own. Here is a list of our partners and here's how we make money.

  • 50+ mortgage lenders reviewed and rated by our team of experts.
  • 40+ years of combined experience covering mortgages and financial topics.
  • Objective, comprehensive star rating system assessing 120+ categories and 5,000+ data points.
  • Governed by NerdWallet's strict guidelines for editorial integrity.
NerdWallet's mortgage content, including articles, reviews and recommendations, is produced by a team of writers and editors who specialize in home lending. Their work has appeared in The Associated Press, USA Today, The Washington Post, MarketWatch, Newsweek and many other national, regional and local publications. They have been cited in publications including The Wall Street Journal, and appeared on NerdWallet's "Smart Money" podcast as well as local TV and radio.

8 Best Interest-Only Mortgage Lenders of 2024

Have you or your spouse served in the military?

We’ve got more home loan options for you. Show me

Lender
NerdWallet Rating
Min. credit score
Min. down payment
Learn more
Rate

Rate: NMLS#2611

Top 3 most visited 🏆
Learn more
at Rate
at Rate
Home loans overall
Best for easy-to-browse interest-only option

620

3%

PNC

PNC: NMLS#446303

LEARN MORE
on NerdWallet
5.0
/5
Home loans overall
Best for jumbo lending overall

620

3%

LEARN MORE
on NerdWallet
Flagstar

Flagstar: NMLS#417490

LEARN MORE
on NerdWallet
5.0
/5
Home loans overall
Best for jumbo loan variety

N/A

5%

LEARN MORE
on NerdWallet
Truist

Truist: NMLS#399803

LEARN MORE
on NerdWallet
4.0
/5
Home loans overall
Best for jumbo loan specialization

620

3%

LEARN MORE
on NerdWallet
Wells Fargo

Wells Fargo: NMLS#399801

LEARN MORE
on NerdWallet
4.5
/5
Home loans overall
Best for jumbo loan specialization

620

3%

LEARN MORE
on NerdWallet
Rate
Learn more
at Rate
at Rate
Rate

Rate: NMLS#2611

5.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItRate boasts a streamlined application process, with full underwriting in as little as one business day, though average fees are higher than many competitors’.
Pros
  • 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.
Cons
  • Origination fees are on the high side, according to the latest federal data.
  • HELOC requires immediate, full withdrawal of funds.
Read Full Review
PNC
LEARN MORE
on NerdWallet
PNC

PNC: NMLS#446303

5.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItPNC Bank has a variety of appealing mortgage options, including jumbo loans, programs for first-time home buyers and home equity lines of credit.
Pros
  • 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.
Cons
  • 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.
Flagstar
LEARN MORE
on NerdWallet
Flagstar

Flagstar: NMLS#417490

5.0
Home loans overall
NerdWallet rating
Min. credit score

N/A

Min. down payment

5%

Why We Like ItFlagstar Bank stands out for its range of accessible loans and programs, including loans with flexible requirements and down payment grant options. Its mortgage operations will be acquired by Mr. Cooper in 2024.
Pros
  • 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.
Cons
  • 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.
Truist
LEARN MORE
on NerdWallet
Truist

Truist: NMLS#399803

4.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItTruist stands out for its range of accessible mortgage products, including government or conventional loans with flexible credit and down payment requirements.
Pros
  • Offers mortgage options focused on affordability.
  • Convenient online application.
  • Offers a HELOC and construction loans.
Cons
  • HELOCs are not available in every state.
  • Borrowers must reach out for customized rates.
Wells Fargo
LEARN MORE
on NerdWallet
Wells Fargo

Wells Fargo: NMLS#399801

4.5
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItWells Fargo has significant upsides and shortcomings. Sample rates are easy to view, assistance programs may apply and the lender earns solid scores in our rankings, but its consumer trust track record is rough.
Pros
  • 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.
Cons
  • 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
LEARN MORE
on NerdWallet
Bank of America

Bank of America: NMLS#399802

4.0
Home loans overall
NerdWallet rating
Min. credit score

660

Min. down payment

5%

National / regional

National

Why We Like ItBank of America offers low interest rates, in-person service and plenty of loan options, but it was fined by regulators for reporting inaccurate mortgage data.
Pros
  • 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.
Cons
  • 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
LEARN MORE
on NerdWallet
Bethpage Federal Credit Union

Bethpage Federal Credit Union: NMLS#449104

4.0
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItBethpage Federal Credit Union offers some specialty loans, like financing for co-ops and nonwarrantable condos, and a fully online application, but no online preapproval.
Pros
  • Specialty loans include financing for co-ops and nonwarrantable condos.
  • Offers conventional loans for manufactured homes.
  • Highly rated mobile app.
Cons
  • 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
LEARN MORE
on NerdWallet
Network Capital

Network Capital: NMLS#11712

4.5
Home loans overall
NerdWallet rating
Min. credit score

620

Min. down payment

3%

Why We Like ItNetwork Capital stands out for its wide range of mortgage offerings, including niche products like physician loans, non-QM loans, ITIN loans and mortgages for manufactured homes.
Pros
  • 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.
Cons
  • 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.

To recap our selections...

NerdWallet's Best Interest-Only Mortgage Lenders of 2024

  • Rate: Best for easy-to-browse interest-only option
  • PNC: 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
NerdWallet Pixel