The House of Your Dreams
Can Be a Reality

Navy Federal Credit Union's interest-only loans are available as both fixed- and adjustable-rate mortgages and can be used for primary residences and second homes, though the rates and terms differ. These loans are ideal for borrowers with fluctuating or rising income, allowing them to make the interest-only payments when funds are tight and make substantial payments to the principal when their income rises.

  • Fixed Rate: At the end of the initial 10 years, loans amortize for the remaining term to include principal and interest. As a result, payments will increase.
  • Adjustable Rate: Rates may adjust after the initial fixed-rate period, which could lead to higher monthly payments in the future; however, principal payments won't be required until the eleventh year.
  • Refinance options available

Rates1 Rates as of:

Interest-only mortgages are available as both fixed and adjustable rate. Interest-only fixed-rate loan payments remain the same for the first 10 years, and then adjust to include principle. Adjustable rates start with a low, fixed rate, and then adjust upward or downward after the initial fixed term according to an index.

We offer both conforming and jumbo interest-only mortgages. The maximum loan limit for conforming loans is typically $453,101, though the loan limit can vary by state and county. Jumbo loans are for amounts greater than $453,101.

To get rates for our interest-only mortgages, call 1-888-842-6328 today.

Interest-Only Mortgages Payment Example*

Compare Typical Mortgage Transactions for a $180,000 Mortgage with a 30-Year Term

Fixed Rate
6.76% APR
5/1 ARM
Fixed for first 5 years
Initial Interest Rate 6.5% (7.923% APR)
Max rate 11.5%
5/1 Interest-Only ARM
Fixed for first 5 years
Interest only for first 10 years
Initial Interest Rate 6.625% (8.005% APR)
Max rate 11.625%
Minimum Monthly Payment Year 1-5 $1,167 $1,138 $994
Monthly Payment Year 6
No change in rates
$1,167 $1,138 $994
Monthly Payment Year 6
2% rise in rates
$1,167 $1,357 $1,294
Monthly Payment Year 10
5% rise in rates
$1,167 $1,702 $1,832
How much will you owe after 10 years? $153,238 $168,500 $180,000
How much interest will you pay over the
initial term (5 years) of the loan?
$59,025 $56,763 $59,625

*Taxes & insurance not included, therefore the actual payment obligation will be greater.

1Rates are based on evaluation of credit history, loan-to-value, and loan term, so your rate may differ. ARM rate adjustments are determined by an index and margin, the index of which is variable and therefore unknown for future payments.