Besides the lower amount you have to pay monthly, there isn't a whole lot that is positive about the Interest Only (IO) mortgage. That hasn't stopped people from staying away from them.
While nearly non existent 5 years ago, they now account for about a third of all new housing loans according to mortgage data firm LoanPerformance. In areas where the housing market is hottest, as many as 7 out of every 10 new loans are the interest only type.
While the lower rates allow people to afford more home that with a traditional mortgage, the low payments don't last forever. Eventually the interest-only mortgage will convert into a standard loan. Unless the loan is refinanced before the interest only loan converts, most people will see a huge increase in their required monthly payments.
For a look at the pros and cons of interest only mortgages, money.cnn.com currently has a good article on their site.