An interest only mortgage is much like a line of credit. It means that you can pay only the interest on the mortgage. This type of mortgage will be greatly useful in order to significantly lower the amount paid monthly. However it also means that the debt will never be paid off.
Getting a interest only mortgage should be justified by sound financial reasoning. Interest only mortgages should be taken only if you require short-term financial stress, or if you possess an investment property that is building equity due to a hike in market prices. Another reason maybe if you can completely write off your mortgage interest as part of a business venture and if it can reduce your taxes. Also obtaining an interest only mortgage would help if you were to come in to financial trouble and need to reduce the payment amount for a month or two. This type of mortgage plan can also benefit those who have a fluctuating income, such as sales staff who are eligible for commissions. If you do not have clearly defined reasons, it may not make sense for you to enter in to an interest only mortgage. You should always speak to a financial advisor before signing up for an interest only mortgage in order to clearly define the benefits of obtaining one.