"Calif Bill" wrote in message
nk.net...
The payment for a P&I loan would not be much more than the payments on an
interest only loan for a 30 year mortgage.

A conventional loan would be *alot* more *because* of the low interest rate.
For example, the P&I on an $800k loan at 4.25% is $3935.52. The interest on
that same loan is $2833.33. That's an extra $1100/month payment. Of
course, you couldn't get a 30 year fixed at 4.25%, so the payment difference
would be even higher than $1100. Probably closer to an extra $1500/month.
As rates go higher, then the difference between an interest-only and a fully
amortized loans becomes miniscule.




With the present low interest
rates, you should lock in the low interest rate with a 30 year fixed.
Rates
are only going up, as they have doubled in the last year alone. In 5
years,
you are probably looking at probably a 8% minimum loan.

If my loan payment went from $2833/month (current payment..not including
taxes and insurance), to $5333.33/month (paying interest-only on the same
amount financed at 8%), I could afford that in 5 years. That's a
$2500/month jump, but I should have $4000/month in extra disposable income
by then, so it more than covers it.

Today, I can't swing the extra $1500/month...so that's why I'm doing an
interest-only loan.