To better serve the growing number of consumers who are becoming increasingly sophisticated about managing their debt, E-LOAN, Inc. (Nasdaq:EELN), a leading online lending company, today unveiled interest-only first mortgage loans. These attractive mortgage products – traditionally offered only to wealthy, private clients of financial institutions – are now widely available to mainstream, creditworthy Americans.

E-LOAN’s interest-only mortgage products are designed to give homeowners and homebuyers lower monthly payments. For homebuyers, low interest-only mortgage payments often translate into the ability to afford “more house.”

“The reality is that the combination of a soft economy and strong home prices have left many people, particularly first-time homebuyers, wondering whether they can afford to buy a home right now,” said Chris Larsen, E-LOAN’ s Chief Executive Officer. “However, with an interest-only product, people may be pleasantly surprised that they can actually afford a 15 to 20 percent more expensive home than they thought they could.”

In today’s interest rate environment, taking advantage of an interest-only ARM instead of a 30-year fixed rate mortgage can generate an increase in cash flow. For example, at current interest rates, monthly payments on a $225,000 loan with a 30-year fixed mortgage would be $1,497 while the payment on a 5-year interest-only ARM would be only $1,219, a difference of $278 per month. Over the first five years of the loan, the difference adds up to $16,690.

E-LOAN’s interest-only products are available on 6 month, 5-year, 7-year and 10-year adjustable rate mortgages for purchase or refinance. Interest-only payments provide the benefit of lower monthly payments and still allow repayment of the principal balance if the borrower chooses to do so. Borrowers enjoy the mortgage interest tax deduction benefits associated with more traditional mortgage products.

Editor's note:Lower monthly payments on 30-year interest-only adjustable rate loan result from deferral of principal payments for 10 years; monthly payments are fully amortized for the remaining 20 years. Example based on a fully-amortized 30-year fixed rate loan with an interest rate of 7.0% (7.12% APR), and discount points of 0.732%, as compared to a 5-year fixed-to-adjustable 30-year adjustable rate interest-only loan at 5.33% APR, with fixed interest rate of 6.5% for the first 5 years, and discount points of 0.924%. Example assumes CA property with estimated $281,250 value, 30-day rate lock, and impounds. For additional information on E-LOAN’s interest-only products, visit www.eloan.com. Consult your tax advisor regarding deductibility of mortgage interest.

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