The first mortgage is comprised of 80 percent of the home's price. The second loan is only for 20 percent minus the down payment. 80 20 Mortgage Loans - Second Mortgage spells higher rates In most cases, the interest rate of the second loan of an 80 20 mortgage loan is higher that first. However, if you combine the two payments in an 80 20 mortgage loan, you get lower costs. However, with the index value adjusted every month, your interest-only mortgage rates may also be changed. Six Month Libor Loan - Like the One Month Libor Loan, the interest-only mortgage rate of this loan is the LIBOR index and margin which is 0.125%. The margin will only be adjusted every six months along with the index value. Even with a fixed rate mortgage, interest-only mortgages are still bound to be only temporary. And InterstFirst product only lets interest-only mortgage payments for half of the total term. The expiration schedule of an interest-only mortgage payment is usually at the end of a set period. This makes interest-only mortgages compatible to "amalgam" adjustable rate mortgages. Investors will start buying more bonds while the mortgage interest rates are low. Demand grows and loan sellers offer their products with lower mortgage interest rates. Thus consumers will be able to get loans for decreased mortgage interest rates. Mortgage interest rates are based on a financial instrument called index. Balloon payment mortgages are called such because borrowers who are on this type of loan are usually set up for a "balloon" payment at the end of their loan term. In most other loans, monthly payments do not only pay off the interest but also chip away at the principal amount - the original amount owed. So, if you were to get a second mortgage loan of $10,000 with an eight-point fee, then you would have to pay $800 in "points." Second mortgage loan companies may charge you in varying number of points so if it might be helpful if you do a comparison first. Second Mortgage Loan Rates Second mortgage loans have different payments plans.