With the interest only loan, wouldn't you need to make sure that you had non-recourse debt, or that the property was bought with a business entity that protected your 2 million in case of default? Are most mortgages (I'm specifically thinking in the U.S.) non-recourse in the sense that the property is the only collateral? Or is there still a way for the bank to come after your personal assets? I'd want to be 100% sure of the answers to these questions before betting on being able to walk away if the house loses value.
Most private mortgages in the USA use the house as the only collateral, however if you put less than 20% down most banks require some form of PMI to reduce their risk. This is a large part of why the housing bust has hit banks so hard, also many of the company's selling PMI went bust so the coverage became worthless.
