Interest-Only Mortgage Calculator
Calculate interest-only mortgage payments and compare with principal + interest
About this calculator
An Interest-Only Mortgage Calculator helps you determine monthly payments when you only pay interest for a specified period, without reducing the principal balance. This tool is essential for understanding the true cost of interest-only loans compared to traditional principal-and-interest mortgages. It shows how much you'll save initially versus the higher payments required later when principal payments begin, helping you make informed decisions about mortgage options and budget planning.
How to use
Enter your loan amount, interest rate, and interest-only period length. The calculator will display your monthly interest-only payment and compare it with a traditional mortgage payment. Review the payment breakdown to understand when principal payments will begin and how your monthly obligation will change.
Frequently asked questions
What is an interest-only mortgage?
A loan where you pay only interest for an initial period, typically 5-10 years, before principal payments begin.
Are interest-only mortgages risky?
Yes, because you don't build equity initially and face higher payments when the interest-only period ends.
Who should consider interest-only mortgages?
Borrowers expecting income increases, planning to sell soon, or needing lower initial payments for cash flow purposes.