Deferred Interest Mortgage

It's pretty self explanatory - this is a mortgage where the interest is not paid for a duration of time.

At the start of the mortgage term, when this period is over, the amounted interest is added on to the original loan.

Adding the total is one method. This will give you a loan figure that is new. The new loan amount will be calculated with the interest payments.

Another valid method is to add the interest on to the original loan and then taking the cost and spreading it it out.

Remember if you decide to use the first option, you will end up paying the interest on the deferred interest. Thus making it the more expensive option.