Not all Interest Only loans are created equal. Many people view these vehicles with sceptism but to sophisticated investors they are valuable. Here is an example of what I am working on as we speak (involving an interest only loan on an investment property) Condo next to a State University asking $55,000. Rents for 650 - 750. 100% Interest Only at 6.5% fixed (Amortized over 30 years principle payments not required for 10 years) Gross rents $8,400 IO Mortgage payments $3,575 Net rents (NOI) are less but there is alot of wiggle room. The benefit: You are not taking large losses when the unit is not rented out and if you need to replace something you simply pay interest only that month. Otherwise you pay interest and principle. A portfolio of these properties makes for a great retirement plan...... It sure beats social security.