Interest Only Mortgage Loan or Rent Payments?

Many people try to decide between an interest only mortgage loan and paying rent. Depending on your current situation, both options could have some merit. If you are renting and you can not decide whether or not to keep paying rent or get an interest only mortgage, here are a few things that you'll want to consider. 

Cheaper Payment

One thing that you will want to consider is which payment is less expensive. When you get an interest only mortgage, sometimes the payment will be higher than what you are used to with rent. If renting is higher, then you may want to go with the mortgage. The price of the monthly payment should be one of your major considerations. 

Interest Deduction

When you are comparing the two options, the interest only mortgage presents you with one major advantage. When you are paying a mortgage payment, you will get to deduct all of the interest that you pay for the year on your income taxes. When all you are paying is interest, this means that you can deduct your entire mortgage payment from your income taxes at the end of the year. This can amount to a huge tax savings, which can tip the scales in favor of the interest only mortgage instead of renting.