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40-Year Fixed-Rate Interest-Only Loans

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INTEREST-ONLY PAYMENT
Program Highlights
Program Serves
FAQS

At LendSure Mortgage Corp., our 40-year fixed-rate interest-only loan lets investment and business-purpose borrowers qualify on the interest-only payment instead of a fully amortized one. For your clients, that lower qualifying payment can mean a stronger DSCR ratio, a lower debt-to-income ratio, and more room to make a file work, all at a rate that stays fixed for the full term.

If you have a client whose deal is close but not quite working on a fully amortized payment, submit your scenario and our team will review how IO qualification changes the picture.

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Qualifying on the Interest-Only Payment

For investment and business-purpose loans, we qualify using the IO payment rather than the fully amortized payment. Because the IO payment is lower, both ratios move in your client’s favor: debt-to-income comes down, and the debt service coverage ratio goes up.

On DSCR files, this is the feature that matters most. A property that falls short of 1.0x on an amortizing payment may clear it on the IO payment. The gap between the two payments widens as loan size increases, so the effect on DSCR and DTI becomes more pronounced on larger loans.

How Owner-Occupied Loans Qualify

Owner-occupied loans qualify on the 30-year amortizing payment, so the IO qualifying advantage applies to investment and business-purpose files. Owner-occupied borrowers still have access to the IO payment option and carry no prepayment penalty.

How the Loan Is Structured

The rate is fixed for the full 40-year term. The first 10 years are interest-only. After that, the loan converts to a fully amortizing 30-year payment at the same rate, with no balloon. Your client knows what the payment will be at each stage from day one.

Program Highlights

  • Qualify on the interest-only payment for investment and business-purpose loans
  • Lower qualifying payment supports a stronger DSCR ratio and a lower DTI
  • Fixed rate for the full 40-year term
  • 10 years interest-only, followed by 30-year fully amortized at the same rate
  • Loan amounts up to $3,500,000
  • No prepayment penalty on owner-occupied properties
  • Origination and discount points can be financed into the loan with no out-of-pocket cost
  • Financed points do not raise the LTV pricing bucket
  • Eligible for Full Doc, DSCR, and 12/24-month Bank Statement programs

Who This Program Serves

Real estate investors using DSCR financing see the most direct benefit. Qualifying on the IO payment raises the ratio, which can decide whether a deal works in markets where rents don’t comfortably cover a fully amortized payment. The lower monthly obligation also supports cash flow from the first payment.

Self-employed clients using our Bank Statement program to buy investment property can qualify on the IO payment to bring DTI down, which can support a larger loan than a fully amortized payment would allow.

High-net-worth clients who want to put equity to work, preserve liquidity, and lock in a long-term fixed rate often find the combination of a 40-year term and IO flexibility a strong fit.

Ready to Run the Numbers?

The difference between the IO and fully amortized payment grows with loan size, and so does its effect on DSCR and DTI. Submit a scenario and we’ll show you both payments side by side for your client’s file.

Ready to Submit a Scenario?

Submit your loan scenario or become an approved broker to get started.

Frequently Asked Questions

Which loans qualify on the interest-only payment?

Investment and business-purpose loans on this program qualify on the interest-only payment. Owner-occupied loans qualify on the 30-year amortizing payment, though owner-occupied borrowers can still make IO payments during the first 10 years.

How does qualifying on the IO payment affect the DSCR ratio?

Qualifying on the IO payment raises the DSCR ratio because rents are measured against a smaller monthly obligation. On our DSCR program, this can move a deal from below 1.0x to above it, which is often the deciding factor on a file.

How does IO qualification affect debt-to-income?

A lower qualifying payment reduces your client’s debt-to-income ratio on investment and business-purpose loans. For self-employed clients on bank statement income, this can support a larger loan than a fully amortized qualifying payment would allow.

Is the rate fixed for the entire 40 years?

The rate is fixed for the full 40-year term, through both the IO period and the amortizing period. There is no ARM component and no rate adjustment at year 10.

What income documentation types are eligible?

This program is eligible for Full Doc, 12 or 24-month Bank Statement, and DSCR documentation. Your Account Executive can confirm fit for your client’s specific file at scenario submission.

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(888) 707-7811

Contact Us: (888) 707-7811