Look at monthly payment on 100 Year mortgages, etc. Look at how much of the inital payments on a 30/40 year mortgage are interest as aposed to principal.
Bottom line is this…the lender is going to make their money. And every product is designed to give an investor nearly the same yield.
well, with an interest only loan, everytime you pay toward the principal balance, your interest only payment decreases. so if you make the same monthly payment on an interest only mort that you would if it were principal and interest, the loan will be paid off faster with interest only.