Free Interest-Only Mortgage Calculator
Calculate payments during the interest-only period and the fully amortizing period of an interest-only mortgage.
USD
%
years
years
Interest-Only Monthly Payment
$2,916.67
Amortizing Monthly Payment$3,876.49
Payment Increase at Amortization$959.83
Total Interest (IO period)$350,000
Total Interest (amortizing period)$430,359
Total Interest Over Loan Life$780,359
Interest-Only Monthly Payment vs Interest-Only Period
Interest-Only Mortgages
An interest-only mortgage allows you to pay only the interest for an initial period (typically 5-10 years), after which the loan converts to fully amortizing payments.
How Payments Work
Interest-Only Period: Monthly Payment = Loan Balance x (Annual Rate / 12)
Amortizing Period: Standard P&I payment calculated on the full balance over remaining years
Advantages
Risks
Example Calculation
A $500,000 loan at 7% interest, 10-year IO period, 30-year total term.
- 01Monthly rate: 7% / 12 = 0.5833%
- 02IO payment: $500,000 x 0.005833 = $2,916.67/month
- 03IO period interest: $2,916.67 x 120 = $350,000
- 04Amortizing period: 20 years = 240 months
- 05Amortizing payment: $500,000 over 240 months at 7% = $3,876.83/month
- 06Payment shock: $3,876.83 - $2,916.67 = $960.16 increase
- 07Amortizing period interest: $3,876.83 x 240 - $500,000 = $430,439
- 08Total interest: $350,000 + $430,439 = $780,439