Nearly half of the home mortgages in Atlanta are interest-only mortgages. Owing to the price appreciations of homes being much higher than the appreciations in wages in Atlanta and worldwide, people generally search for options to compensate. In such a situation, Atlanta banks came forward with a new weapon called interest-only home mortgages.

Under interest-only mortgages borrowers pay lower monthly payments during the first few years of the loan. That means that for 5 to 7 years, the borrowers\' monthly payments are applied only to the interest, not the principal. After the time period, the borrower has to pay hefty monthly payments including interest and principal for the remaining period of the loan. The interest-only mortgage is useful to borrowers only if they invest the amount they have saved into a retirement account, use it to pay the principal amount of the mortgage or invest it in savings as a hedge against rising interest rates. However interest-only mortgages are beneficial only to certain types of borrowers who have solid financial foundation or who are savvy in applying money in productive investments.

Interest-only mortgages offer an option to purchase a higher priced house. In the initial period, they will pay only the interest amount for nearly seven years. In the meantime, if house prices increase, they will resell the house if they cannot afford the future monthly payment, which is obviously a higher one.

Atlantans prefer the interest-only mortgage, which occupy a major role in the mortgage industry. Atlanta interest-only mortgages offer adjustable LIBOR rates of interest, which are self-adjusted per fluctuations in market interest rates.

Interest-only mortgages do have a downside in that they are suitable only to those cities in which building is booming. But this is not the case with Atlanta. Therefore in order to develop the housing market, payment of the balance amount of the loan is essential.