With a pay-option ARM, you can choose a 1% interest rate, depending on the lender. That is lower than the interest only. Actually, it is referred to as a negative amortization loan because you are adding on to your principle each month.
hmmmm... I think I've got a new favorite bad loan/mortgage idea
No one is noticing the distinction between an ARM and an Option ARM. Except the unlucky stiffs mentioned in the article, who now understand the difference all too well.