Interest Only home equity lines of credit have begun to draw the interest of homeowners today. Many are looking for home equity credit and the interest only loans are made readily available. While the name may sound great the truth behind this sort of home equity loan can be less than favorable. Once a homeowner stops to look at the details behind one of these home equity loans they may have second thoughts before accepting them. They may also be tempted to look for a different sort of home equity loan altogether to suit their needs.

When a homeowner approaches a bank about a home equity line of credit the bank will tend to offer multiple ways to obtain an interest only loan. One example would be the bank that offers a plan which has the homeowner pay the Prime rate plus 5% for a term of five years. Then the homeowner would pay an interest rate on his or her home equity loan that would fluctuate for a ten year period depending on the Prime rate.