An Interest-Only Mortgage is a type of home loan where the borrower pays only the interest for a specified period, usually 5 to 10 years. During this time, the principal balance remains unchanged, which means monthly payments are lower compared to traditional mortgages. After the interest-only period ends, the borrower must start paying both principal and interest, leading to higher monthly payments. This mortgage option can be appealing for those who want lower initial payments, such as first-time homebuyers or investors. However, it’s important to consider the long-term implications, as the principal balance will still need to be repaid later, potentially leading to financial strain.