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Interest Only Loans

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Interest Only Loans

Interest only mortgage loans also referred to as term loans, call for payment of interest only and no principal. In this sense, there is no mortgage loan amortization and the entire loan amount is due upon the expiration of the loan. The advantages for the borrower of this type of loan is that it minimizes the annual mortgage payment and that the whole debt service is tax deductible, since it is only interest, at least in the US and many other countries that have similar provisions in their tax code.

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