Option ARM mortgages have become more and more popular amongst borrowers investing in property and borrowers that are looking to manage their cash flow. This loan product consists of 4 monthly payment options based on a fully indexed rate.

Your minimum payment option can range from 1% to 5% on these loans and can be very handy for commissioned sales people or investors looking to maximize cash-flow. By making the minimum payment you will be effectively borrowing money from yourself and deferring interest. Thus creating negative amortization. It's not a good idea to continuously make the lowest possible payment no matter how tempting it may be unless you live in an area that appreciates in value faster than you defer interest.

Your Interest Only payment option is the payment based on your fully indexed mortgage rate. No part of your payment will be paid to the balance or principle of the loan. However, this option does not cause Negative Amortization or defer interest.

Your 15 year amortized principle and interest option allows you to take a more aggressive strategy to paying down your mortgage. This payment option is amortized over 15 years instead of 30 and allows you to pay more towards principle than you would with your traditional 30 year amortized mortgage. Again This option does not cause Negative Amortization or defer interest.

Your 30 year amortized principle and interest option in this loan is available to you so that you may still pay the principle or balance of your loan down with a lower payment. As well this option does not cause Negative Amortization or defer interest.

Interested in seeing other adjustable rate options? Please see below: