Interest-Only Mortgage Calculator

Your details

The total mortgage principal - home price minus your down payment.
The annual interest rate (APR) on your loan, as a percentage.
%
The full length of the mortgage, typically 15 or 30 years.
years
How many years you pay only interest, before principal repayment begins.
years
Currency
Monthly Interest-Only Payment
$2,166.67

What you pay each month during the interest-only period

Monthly Payment After Interest-Only Period$2,982.29
Payment Increase$815.63
Total Interest (Interest-Only Phase)$260,000.00
Total Interest (Amortizing Phase)$315,750.21
Total Interest (Full Loan)$575,750.21
Total Amount Paid$975,750.21
Standard Mortgage Payment (same rate)$2,528.27
Standard Mortgage Total Interest$510,177.95
Extra Interest vs. Standard Mortgage$65,572.26
Interest-Only Loan$1,556,649.38
Standard Mortgage$1,490,984.71

Extra interest vs. standard mortgage: $65,572.26

  • Monthly payment (IO phase)
  • Monthly payment (after IO)
  • Total interest paid
  • Total amount paid

Monthly payment starts at $2,166.67, then jumps to $2,982.29 after the interest-only period.

  • During the 10-year interest-only phase your monthly payment is $2,166.67. After that it rises to $2,982.29 as you begin repaying principal over the remaining 20 years.
  • The payment increase when amortization begins is $815.63 per month (38% higher). Budget for this well in advance.
  • Compared with a standard mortgage at the same rate, the interest-only structure costs you an extra $65,572.26 in total interest over the life of the loan because no principal is reduced during the IO phase.
  • Interest-only loans can make sense when you expect your income to grow, plan to sell before the IO period ends, or need maximum cash flow flexibility today - but the higher long-run cost and payment shock risk should be carefully weighed.

Next stepCompare this total cost against a standard 30-year fixed mortgage and consider whether the monthly savings during the IO phase justify the extra lifetime interest.

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