Considering a 5 Year Jumbo Interest Only ARM Solution?

Nice luxury home at dusk.

Hope to keep your mortgage payments nice and low for a few years? Learn about 5 year jumbo interest only loans and check rates from competing companies.

If you are searching for a non-conforming jumbo loan that can offer you a very low monthly payment for a short period of time, then a 5/1 jumbo IO ARM may be up your alley. With a 5 year jumbo interest only ARM, your rate will be be fixed for the first 60 months of the loan and only the interest portion of the monthly payment will typically be due over the remaining 300 months of the loan (if the loan is amortized over 30 years which many are). ¬†After the sixty month introductory period ends, the note rate will go up or down according to the index that the loan is based upon and defined by the loan’s caps and margin. Confused yet? Let the mortgage providers listed in the survey at the bottom of the page explain the “in’s and out’s” of 5 year jumbo interest only ARM programs. ¬†Best of luck! Be sure to ask whether or not interest only loans are legal in your state as certain states will not allow interest only financing.

Details on 5 Year Jumbo Interest Only Loan Financing

  • Fixed rate introductory period of 60 months. After that time passes, the rate will adjust up or down – ask your loan professional for more information.
  • Interest only payment typically only available for first 60 months. With many of these products the repayment of the principal and remaining interest is then factored into the last 25 years of the loan. Ask your broker or lender for specifics.

You can check pricing information and closing costs from multiple lenders, brokers and banks using the following rate table. Please note that many companies do not post rates for this product but do offer them. You may try to select 5 Year IO from the product selection tool and then call the various lenders to discuss whether or not they have an interest only alternative. More often than not lenders do not post their 5/1 IO rates so we display fully amortizing 5 year adjustable rate pricing so people have a starting off point.

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