Interest-Only Mortgage Calculator
An interest-only mortgage charges just the interest for the first years, so the balance does not fall. When that period ends, the full loan has to be repaid over the time remaining, and the payment jumps.
Enter your figures below. Results update as you type.
Interest-only payment$2,250.00for the first 10 years
- Payment after the interest-only period
- $3,041.46
- Payment increase
- $791.46 (35%)
- Total interest
- $599,949.45
- Payment on a standard loan
- $2,594.39
- Extra interest compared with a standard loan
- $65,968.19
How the Interest-Only Mortgage calculation works
Interest-only payment = loan x rate / 12
On $400,000 at 6.75%, the interest-only payment is $2,250. After 10 years the loan is repaid over the remaining 20, lifting the payment to $3,041.46, a 35% increase. Compared with a standard 30-year loan, the interest-only version costs about $65,968 more in interest.
Frequently asked questions
How do I calculate an interest-only payment?
Multiply the loan by the yearly rate and divide by 12. $400,000 at 6.75% is $2,250 a month.
What happens when the interest-only period ends?
The payment is recalculated to repay the whole balance over the remaining term. Because none of the principal was paid down, the new payment is higher than it would have been on a standard loan from the start.
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