Nontraditional Mortgage Definition

The term nontraditional mortgage is imprecise, and is used to indicate any form of mortgage that does not have an initial down payment of about 20% or does not have a repayment period of about 25 years with a regularly-compounding interest rate. Examples of nontraditional mortgages would include interest-only mortgages, payment option adjustable rate mortgages, and subprime mortgages.