Loan program · Payment Smart

The 40-Year Interest-Only Loan

Payment Smart is a 40-year fixed-rate loan with a 10-year interest-only period, then 30 years of principal and interest. It gives the lowest payment up front, with no rate adjustment and no balloon. The interest-only payment recalculates monthly on your remaining balance, so principal paydowns lower next month's minimum immediately, and there is never a prepayment penalty. As little as 15% down with no mortgage insurance at any LTV. Loan amounts from $125,000 to $3,500,000.

A 40-year fixed-rate loan with a 10-year interest-only period, followed by 30 years of principal & interest. The lowest possible payment up front, with the flexibility to pay down principal in those first 10 years, which lowers the minimum interest-only payment too. No rate adjustment. No balloon.

Run your numbers

Seeded with today's 40-year interest-only rate (6/22/2026) as a reference point. Your Payment Smart quote is priced to your exact scenario. 15% minimum down; no mortgage insurance either way.

Purchase price

Down payment

Rate

That's $240,000 down.

Interest-only payment · years 1–10

$5,400/mo

Same loan, 30-yr P&I

$6,227/mo

Monthly flexibility

$827/mo

Loan $960,000 · 80.0% LTV · no mortgage insurance. The interest-only payment recalculates monthly on your remaining balance, so a principal paydown (no penalty) drops next month's minimum immediately.

Estimates for planning only, principal and interest shown (taxes, insurance, and HOA additional). Rates change daily and your rate depends on the full scenario. Not a commitment to lend.

How it works

First 10 years

Interest-only

The lowest possible payment. Carry more home, or free up cash for everything else.

Anytime

Pay principal down

No penalty. The minimum recalculates monthly, so a paydown drops your very next payment.

The next 30

Principal & interest

Fully amortizing at the same fixed rate. No adjustment, no balloon, ever.

Why it wins

Fixed for all 40 years, no gotcha.

A true fixed rate. The first 10 years are interest-only, then it simply becomes principal and interest at the same rate. No adjustment, no balloon, no reset, ever.

The lowest payment in the room.

When rates are high, it is how a payment-sensitive buyer gets the home they actually want instead of settling.

No mortgage insurance, ever.

As little as 15% down with zero MI at any loan size, real money off the monthly payment a normal low-down loan cannot touch.

Full doc or non-QM, your choice.

Qualify with full documentation (W-2s and tax returns) or with non-QM income such as bank statements, asset depletion, or DSCR.

The shape of the loan

40 yrs

Fixed term

first 10 interest-only, then 30 of P&I, with no rate adjustment and no balloon

15%

Minimum down

no mortgage insurance at any LTV

$3.5M

Loan ceiling

from $125,000 · primary, second homes, investments to 4 units

Prepay penalty

pay principal any time, and next month's minimum drops immediately

How you qualify: flexible guidelines, with debt-to-income up to 50%.

Who it fits

Short-term owners, move-up and first-time buyers, the self-employed, and commission earners who want the lowest payment up front.

Short-term homeowners who plan to sell or refinance within a few years and want a lower initial payment.
First-time and move-up buyers easing into a new house payment.
Cash-flow-focused borrowers who want to free up monthly cash for other investments or expenses.
High-net-worth investors wanting liquidity to reinvest while keeping the home.
Commission-based earners who benefit from lower fixed payments and variable income.
Buyers who may make a large principal reduction later to drop the monthly payment.

Straight answers

A 40-year fixed-rate loan. The first 10 years are interest-only, then it converts to principal and interest for the remaining 30 years. No rate adjustment, no balloon.

Short-term homeowners, first-time and move-up buyers, cash-flow-focused borrowers, high-net-worth investors, and commission-based earners who want a lower initial payment.

No. There is no mortgage insurance, even with less than 20% down.

Loan amounts from $125,000 to $3,500,000, on primary residences, second homes, and investment properties.

Yes, any time, with no prepayment penalty. The interest-only payment is recalculated monthly on the outstanding balance, so a principal paydown lowers the very next month's minimum payment.

The rate is fixed for the entire 40 years. You get ARM-like payment flexibility in the first decade without the rate-adjustment risk, and often with as little as 15% down where bank portfolio products want 20%.

You qualify under flexible Non-QM guidelines, with debt-to-income up to 50%.

Your loan officer

Home First Financial

Brett Hickman

Mortgage Loan Originator · NMLS #2010859

+19493508005

Text Brett to check eligibility →