Interest Only Mortgage Calculator

Estimate Your Monthly Payment During the Interest-only Period and the Repayment Amount After the Loan Begins Amortizing.

Payment Visualization Comparison

Amortization Schedule

How This Interest Only Mortgage Calculator Works

An interest-only mortgage allows you to pay only the interest charges for a set introductory period. During that time, your monthly payment is lower because you are not paying down the principal balance unless you make extra payments voluntarily.

After the interest-only period ends, the remaining loan balance is repaid over the rest of the loan term. Because the repayment period is shorter, the monthly payment usually increases compared with the initial interest-only payment.

This calculator estimates:

• Your payment during the interest-only period
• Your payment after the interest-only period ends
• Total interest paid with and without extra payments
• Total payment amount over the life of the loan
• Monthly and annual amortization schedules
• Potential interest savings from extra payments

What to Know About Interest-Only Mortgages

Interest-only home loans can offer lower initial monthly payments, which may help with short-term cash flow. However, they can also lead to higher payments later because the principal must still be repaid over a reduced time period.

Borrowers should carefully review the loan terms, interest rate structure, repayment period, and the long-term affordability of the loan. If your loan has a variable rate, actual future payments may be higher than the estimates shown by this calculator.

Making extra payments during the interest-only period may reduce the remaining principal balance, lower total interest costs, and lessen the payment shock when full repayment begins.

FAQ

What Is an Interest-Only Mortgage?

An interest-only mortgage is a loan where you pay only the interest for a specific period. After that period ends, you begin paying both principal and interest.

Why Does the Payment Increase After the Interest-only Period?

Once the interest-only phase ends, the remaining balance must be repaid over the rest of the loan term. Because there is less time left to repay the loan, the monthly payment is usually higher.

Can Extra Payments Reduce Total Interest?

Yes. Extra payments usually reduce the principal balance faster, which can lower the total amount of interest paid over the life of the loan.

Does This Calculator Include Taxes, Insurance, or Hoa Fees?

No. This calculator focuses on principal, interest, and optional extra payments. Property taxes, homeowners insurance, HOA fees, mortgage insurance, and other costs are not included unless you add them separately.

Is This Calculator Suitable for Adjustable-rate Mortgages?

This calculator is best used for fixed-rate estimates. If your interest-only mortgage has an adjustable rate, future payments may change and actual results may differ.

References

For additional information about mortgages, loan disclosures, and home buying guidance, review these authoritative resources:

• Consumer Financial Protection Bureau (CFPB) – Buying a house: https://www.consumerfinance.gov/owning-a-home/
• CFPB – Mortgage resources: https://www.consumerfinance.gov/consumer-tools/mortgages/
• U.S. Department of Housing and Urban Development (HUD) – Homeownership guidance: https://www.hud.gov/topics/buying_a_home
• Federal Trade Commission (FTC) – Mortgage and financing information: https://consumer.ftc.gov/