Some New York buyers and owners expect a large future sum, such as proceeds from selling a business or another property, and want to keep cash available until it arrives. An interest-only mortgage can fit that plan, but it carries real risks: your balance does not shrink unless you pay extra, the payment rises later and your equity depends on the home's value. Eligibility varies by borrower, property and investor, and any loan is subject to credit approval.
Call to talk with a licensed loan officer. Programs vary by borrower, property and investor.
Mortgage lenders, brokers and loan originators serving New York are licensed by the New York State Department of Financial Services. Non-QM loans are made by the same licensed lenders and brokers, so you can confirm any company's or loan officer's license on NMLS Consumer Access before you apply.
Where the numbers point in New York
Counties with the most first liens with an interest-only feature (2024):
| County | First liens with an interest-only feature (2024) |
|---|---|
| New York County | 667 |
| Suffolk County | 373 |
| Westchester County | 324 |
| Kings County | 308 |
| Nassau County | 202 |
| Saratoga County | 77 |
| Onondaga County | 71 |
| Erie County | 55 |
| Queens County | 48 |
| Ulster County | 46 |
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Local pages in New York
- Non-QM lenders in New York
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Common questions
What happens when the interest-only period ends?
The loan starts amortizing. Your remaining balance is spread over the rest of the term, so each payment now includes principal as well as interest, and the payment goes up. If the rate is adjustable, it may change too. Many borrowers plan to pay down the balance, refinance or sell before or at that point, but none of those outcomes is certain.
Who should consider an interest-only mortgage?
It tends to suit borrowers with variable income, such as business owners or commission earners, and those expecting a large future sum, such as proceeds from a business or property sale. It can also suit people with significant assets who want to keep cash flexible. It is generally a poor fit if you need the interest-only payment just to afford the home.
What is an interest-only mortgage?
An interest-only mortgage is a loan where the required payments cover only interest for an initial period. Your balance does not go down during that time unless you pay extra. After the interest-only period, the loan amortizes and payments include principal and interest, which raises the payment. The feature is offered on non-QM loans because Qualified Mortgage rules exclude interest-only payments.
Other non-QM options in New York
Bank statement loansNon-QM lendersSelf-employed1099 loansP&L loansAsset depletionNo-doc / stated incomeNew self-employedITIN loansForeign nationalNon-warrantable condoBank statement HELOC
Related guides
- QM vs. Non-QM Loans: What the Difference Means for You
- How to Compare Non-QM Loan Offers: Loan Estimates, Features and Fit
- What Is a Non-QM Loan?
Interest-Only Mortgages overview · New York non-QM overview
- 2024 HMDA data