Your Interest Only Loan Rate: Prevent Fluctuation
The problem with this plan is that the longer you wait before your loan is amortized, the less time you have to pay off the principal of your loan - and that means that your monthly payments may have to be raised a great deal in order to ensure your loan is paid off in time.
The safest way to prevent a sharp fluctuation in your interest only loan rate payments is to sign up for the shortest amount of time possible for interest-only payments. Most interest-only loans offer you a time period of a few years before your loan amortizes - three years, five, or even ten. Your monthly payments will rise once your loan amortizes no matter what you do. But if your loan amortizes after only three years as opposed to ten, that gives you seven more years to make payments towards the principal of your loan - which also means the payments will not have to be raised as high.
