Payment-option loans are exotic and certainly riskier than traditional loan programs, but interest-only loans are only marginally so. So little principle is applied to a 30-year loan in the first five to 10 years that the net effect on paydown is negligible. Yet the monthly payment difference is significant enough to allow first-time home buyers to jump on the equity bandwagon and allows growing families the ability to move up without becoming house poor. Besides, the life of an average mortgage is now less than five years. Situations change, people refinance, sell, etc., muting any long-term negative effects.

Interest-only loans (which always allow for principle payments) should not be depicted in the same light as payment-option loans, which are far riskier and difficult to understand.