“I’d rather keep my cash working.”
Can I pay just the interest on my mortgage at first?
Yes, with a fixed-rate loan. Pay just the interest at first, for a set number of years. Pay down principal any time in those years, and your minimum payment drops. After that, you pay principal and interest on what’s left, at the same fixed rate. The full schedule, with the APR, is right below.
Quick answers
Rather keep cash working?
Keep your cash. Pay principal when you choose during the interest-only years, and your minimum drops.
Paid in bursts?
Commission, bonuses, a seasonal business. Pay principal in the good months. Keep the minimum in the slow ones.
Tax returns don’t show what you make?
Bank statements or savings can count as income instead.
The numbers
The 40-year interest-only schedule, at our latest posted rate.
Every payment, how long it lasts, the rate and the APR, side by side.
Every payment, at the same size. Example: a $750,000 home with 25% down ($187,500) and a $562,500 loan. 40-year fixed, interest only for the first 10 years.
- Years 1 to 10 $3,574 a month Interest only Rate 7.625% · APR 7.764%
- Years 11 to 40 $3,981 a month Principal and interest Rate 7.625% · APR 7.764%
Interest rate 7.625% fixed · APR 7.764% · 480 monthly payments at one fixed rate. The minimum payment is interest only for 10 years, then the balance is paid off over the remaining 30 years.
Taxes and insurance are not included, so the actual payment will be higher.
Pay down principal during the first 10 years and your interest-only minimum drops. From year 11 the payment is principal and interest on whatever balance is left, so paying down early can bring it below your original minimum of $3,574 a month.
Example only, not a quote or an offer to lend. The rate and APR are Home First Financial's posted 40-year interest-only rate as of Friday, October 9, 2026: 7.625% (7.764% APR), based on the purchase of a $750,000 single-family home or condo, primary residence, in California, with 25% down, a 780 credit score and 0 discount points. The APR includes estimated lender fees. Your rate, APR and payment depend on the loan amount, down payment, credit and property, and they can change without notice. Payments shown are principal and interest. Property taxes, insurance, HOA dues and mortgage insurance are not included, so the real payment will be higher. Not a commitment to lend. The 40-year interest-only loan is not a standard loan. It has its own rules for credit, down payment and savings. It needs at least 15% down with credit from 660, or at least 10% down with a 740 credit score on loans up to $2 million. The minimum payment is interest only for the first 10 years, then principal and interest over the remaining 30 years. Interest-only payments do not lower the balance. If you pay no extra principal, the payment after the interest-only years is higher than the interest-only payment. The schedule assumes no extra principal payments unless it says otherwise.
Does it fit you?
3 quick questions. No signup. No credit pull.
What you'll need
- Proof of income: pay stubs, or bank statements if you’re self-employed
- Statements for your savings
- A photo ID
How does it go, step by step?
How does interest only work?
For the first years of the loan, your minimum payment covers just the interest. Pay down principal any time in those years, and your minimum payment drops.
After the interest-only years, the payment covers principal and interest on whatever balance is left. If you pay no extra principal, the payment after the interest-only years is higher than the interest-only payment. If you paid some down, it can be lower than your first minimum.
Who picks interest only?
People with cash they’d rather keep working, and people paid in bursts. For example:
- Paid on commission or bonuses
- A seasonal business, with good months and slow ones
- Self-employed, with bank statements or savings as income
How do I keep the payment down later?
Pay principal when you can. Principal you pay during the interest-only years lowers your minimum now, and the payment after.
Interest-only payments alone don’t lower your balance, and waiting longer to pay principal means more interest over the loan. A simple plan helps, like paying principal in your good months. You qualify on the full payment, so it’s planned for.
How is it different from a regular fixed-rate loan?
A regular fixed-rate loan pays down principal with every payment from day one. This one lets you choose when, during the interest-only years. Both keep the same rate for the life of the loan.
Your loan officer can show both payments side by side, each with its rate and APR.
Questions people ask
What happens after the interest-only years?
After the interest-only years, the payment is principal and interest on whatever balance is left. If you paid no extra principal, that payment is higher than the interest-only payment. If you paid down principal early, it can be lower than your first minimum.
Does the rate change?
No. The rate is fixed for the life of the loan.
Do I qualify on the interest-only payment?
No. You qualify on the full payment, so it’s planned for.
Can I pay extra principal whenever I want?
During the interest-only years, yes, and your minimum payment drops when you do. Ask your loan officer if your loan has a prepayment penalty, especially on a rental.
Do I need a big down payment?
It needs more down than some loans. Your loan officer gives you the exact amount with the rate and APR.
Why is it called non-QM?
Standard loan rules don’t allow interest-only payments. So this loan sits outside the standard Qualified Mortgage rules. That’s what non-QM means.
Does Home First Financial offer interest-only loans in California?
Yes. Home First Financial offers a fixed-rate loan with interest-only payments at first, for buyers across California. You qualify on the full payment. Subject to qualification.
Talk to a loan officer
Call or email a licensed loan officer.
The application takes about 15 minutes, on the secure site we use. Do what you can, and your loan officer calls to fill in the rest.
Prefer to meet in person? Our main office is in Tustin, by appointment.
The fine print
Non-QM financing. Non-QM means the loan sits outside the standard Qualified Mortgage rules, which don’t allow interest-only payments. The minimum payment is interest only for a set number of years. After that, the balance is paid off over the rest of the fixed term. If you pay no extra principal, the payment after the interest-only years is higher than the interest-only payment. Interest-only payments do not reduce the balance, and delaying principal raises total interest. You qualify on the full payment. A larger down payment is required. Subject to borrower and property qualification and current program terms. Not a commitment to lend.
Also called: an interest-only fixed-rate loan (non-QM).
Home First Financial is not affiliated with HUD, FHA, VA, USDA, CalHFA or any government agency.
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