Higher Interest Rates for Bad Credit Mortgage Loans It is only natural that high interest rates are charged for those borrowers who are on a bad credit mortgage loan. Handing out loans to borrowers with poor credit is a risky business and lenders want compensation for the risks they're taking. Bad Credit Mortgage Loan Limits But while rates are indeed high in bad credit mortgage loans, there are also limits to these. The libor index of interest-only mortgage rates stands for London Interbank Offered Rate. LIBOR is the interest rate offered by a specific group of banks in London for matured U.S. dollar deposits. Choosing libor index as basis for your interest-only mortgage rates entitles you to a number of benefits. Adjustable-rate mortgage payments are basically a trade-off - you exchange more risk for lower rate with an adjustable-rate mortgage payment. But despite this, there are some ways to circumvent the risks and increase your chances of landing a good investment in an adjustable-rate mortgage payment. Below are some questions you need to consider: - Is there a possibility that my income will rise up enough to cover higher adjustable-rate mortgage payments should interest rates go up? If the loan is worth $1,000,000, then the difference per month grows to $1,000, a substantial amount that can be put to better use. The savvy investor can make it so that his investment using the money he gets from the per month difference growth of an interest-only mortgage can increase within a short period, thus leveraging incomes to build assets. With this amount, you might want to take on a second mortgage loan that will allow you to repay the entire amount in one or two years. If you pay a second mortgage loan that has a shorter term, the monthly payments may be too high. Payment Calculations for Second Mortgage Loans Before taking on second mortgage loan, be sure that you understand a couple of things first. Variable Rate Mortgage by ING Direct Mortgages The ING Direct line of variable rate mortgages offers one of the lowest rates available in the market today. With a variable rate mortgage interest rate of less than 0.60% for a full five-year term, ING Direct variable rate mortgages are among the top-sellers.