⏳ Interest-Only Mortgage Calculator
Find out what you’ll pay during an interest-only period, and how much your payment increases once you start paying down the principal.
What This Calculator Does
An interest-only mortgage lets you pay just the interest on your loan for a set period, keeping early payments lower, before switching to a fully amortizing payment that includes principal for the rest of the term. This calculator shows both payment amounts so you can see the jump ahead of time.
The Formula
During the interest-only period, the monthly payment is simply Loan Amount × Monthly Interest Rate, since no principal is paid down. Once that period ends, the full original loan balance is amortized over the remaining term using the standard formula M = P × [r(1+r)^n] / [(1+r)^n – 1], which produces a noticeably higher payment because the same balance must now be repaid in fewer years.
This tool is for general planning and educational purposes. Actual interest-only loan terms, qualification requirements, and rate structures vary by lender.