Some lenders offer extensions for their 30-years-due-in-7 balloon payment mortgages. Lenders of this type of loan may extend your balloon payment mortgage for another 23 years but with a new interest rate. These balloon payment lenders base their new interest rates on a conversion formula. In this case, you might have to re-qualify for the balloon payment mortgage should the new interest rate on the mortgage being converted is significantly higher than the old rate. 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. When the interest-only mortgage payment comes to an end your payment will then rise to include principal and interest. The great thing about interest-only mortgages Interest-only mortgage payments also have their advantages. Borrowers can find that there are various practical benefits that an interest-only mortgage can offer. Below are a few facts you need to know about bad credit mortgage loans. 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. On the other hand, if economy weakens, mortgage interest rates go down. In today's market, the mortgage interest rates are much lower than they were in the mid-1980s to the 90s. But within the next year or two, financial experts have come up with predictions mostly outlining the rise of mortgage interest rates. Loans with a 20-year or 15-year note can allow you to save thousands of dollars on mortgage rate payments. However, this also means that your mortgage rate payments every month will also be a lot higher. To avoid this, an adjustable mortgage rate may help you get started on a lower mortgage rate, but if interest rates grow, your monthly mortgage payments will rise also.