Industry News

Most interest-only real estate borrowers pay principal

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A Wells Fargo-commissioned survey of American homeowners shows that the majority of homeowners do pay principal on interest-only real estate loans, despite rising concern over this type of debt. Of the 8 percent of homeowners with interest-only real estate-secured accounts, a 73-percent majority pay both the principal and interest at least some of the time, according to the results of Wells Fargo's Second Annual Survey of American Homeowners. Of the 73 percent, 23 percent pay the principal in addition to interest all of the time while an additional 8 percent make principal payments as well as interest payments outside of the standard payment schedule. Just one in four, or 25 percent, pay only interest all of the time. These behaviors were consistent across both age and income, according to the survey. The nationwide survey of more than 1,300 homeowners was conducted in August 2005 and released today by Wells Fargo. Respondents were questioned about their financial behaviors and atti...