Posted on: 30th Oct, 2010 04:07 pm
I am 57, in the 2nd year of 30 year 4.75% fixed. My home is worth $250000 and will continue to rise in value. My loan is 136000----so that's 114000 equity. I am retired. Why should I continue to build equity? I am a federal government pensioner. Why shouldn't I get an interest only loan? My property will still gain value. I don't believe I'll live to see the loan paid off. This would give me extra cash each month.
It is your discretion whether or not you want to go for a fixed mortgage or an interest only loan. If you go for interest only loans, it will be a bit difficult for you to build equity in your property. You will only pay down the interest but the principal amount remains as is.