Many lending institutions may charge higher rates to the interest only loans because of the high

Many lending institutions may charge higher rates to the interest only loans because of the high risks of default. Interest only loans may seem borrower friendly on the surface and most lending institutions will be more than willing to accommodate you on this kind of a loan. But - Buyer Beware! Interest only loans are starting to drop in popularity due to the long - term interest rates dropping to record lows. These low rates are causing people to rethink their interest only loans and having them want to get out of the interested only loan and into a long term loan at a fixed rate.