Interest-Only Mortgage Calculator
See your low interest-only mortgage payment during the initial period, then the jump to a higher payment when principal repayment begins. Free and accurate.
- Interest-only payment
- 1500
- Amortizing payment
- 2149.29
- Payment jump
- 649.29
How to use
- Enter the loan amount and annual interest rate.
- Enter the interest-only period and the total loan term in years.
- Read the interest-only payment, the later amortizing payment, and the jump between them.
Examples
- $300k at 6%, 10 IO / 30 yr:
IO $1,500 → amortizing $2,149.29 - Payment jump:
$649.29 once principal repayment starts
FAQ
- How is the interest-only payment calculated?
- It is the loan amount times the monthly rate (annual ÷ 12 ÷ 100). No principal is paid, so the balance stays the same during the interest-only period.
- Why does the payment jump later?
- After the interest-only period ends, the full balance must be amortized over the remaining years, so each payment now includes principal — making it larger.
- Is an interest-only mortgage cheaper overall?
- Lower payments early on mean you pay no principal during that time, so you carry the full balance longer and typically pay more interest over the life of the loan.