Interest-Only Mortgage Calculator
See your interest-only payment, how much it jumps when principal payments begin, and the extra interest compared with a regular loan.
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Interest-Only Payment
- Payment after reset
- Payment increase
- Standard loan payment
- Total interest (interest-only)
- Total interest (standard)
- Extra Interest
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Items you add are saved in this browser.
| Loan | IO Years | IO Payment | After Reset | Total Interest | Remove |
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How an Interest-Only Mortgage Works
During the interest-only period you pay just the interest, so the balance doesn't go down. When it ends, the full balance has to be paid off over the remaining years, so the payment jumps.
Interest-only payment = loan × annual rate ÷ 12
Payment afterward = PMT(rate ÷ 12, (term − interest-only years) × 12, loan)
Worked Example
Tips
Interest-only loans are usually adjustable-rate, so the rate can also change when the payment resets; this page assumes a fixed rate. They can suit borrowers with irregular income or short holding periods, but they build no equity except through price growth or extra payments.