Financial Tool

Interest-Only Mortgage Calculator

Compare lower interest-only payments against fully amortizing mortgage payments.

Initial Comparison
Standard Payment:$2,528
Interest-Only:$2,167
Monthly Savings$362
The Danger Zone
Payment AFTER 10 Years:
$2,982
Payment Shock (Monthly Increase)
+ $816

Σ The Formula

P_io = Principal × (r/12)

Real World Examples

Standard I/O
$400k at 6.5%. I/O payment is $2,167 vs $2,528 standard. After 10 years, payment jumps to $3,222.
Payment Shock
The longer the I/O term, the higher the 'Reset' payment will be because the remaining principal must be paid over a shorter timeframe.

# About This Calculator

An Interest-Only (I/O) Mortgage allows the borrower to pay only the interest for a set period (usually 5 or 10 years). The principal balance does not decrease during this time.

While this lowers the initial monthly payment, it leads to 'Payment Shock' once the I/O term ends, as the entire principal must then be repaid over the remaining years of the loan.

How To Use

  1. Enter the **Total Loan Amount**.
  2. Enter the **Interest Rate (APR)**.
  3. Enter the **Interest-Only Term** (how many years you pay only interest).
  4. Enter the **Total Loan Term** (usually 30 years).
  5. Compare the initial savings against the massive payment jump later.

Frequently Asked Questions

Is Interest-Only Mortgage Calculator free to use?+

Yes, Interest-Only Mortgage Calculator on Matheric is completely free to use. We believe in accessible education and utility for everyone.

How accurate is Interest-Only Mortgage Calculator?+

We use standard mathematical formulas and high-precision computing algorithms to ensure results for Interest-Only Mortgage Calculator are accurate for academic and professional use.

Can I use Interest-Only Mortgage Calculator on my phone?+

Yes! Interest-Only Mortgage Calculator is fully responsive and optimized for all devices, including smartphones, tablets, and desktops.

Do you save my data?+

No. We prioritize your privacy. All calculations are performed in your browser or temporarily processed, and we do not store your personal input data.

How do I report a bug?+

If you notice any issues with Interest-Only Mortgage Calculator or have suggestions for improvement, please contact us via the link in the footer. We value your feedback!

Can I request a new feature?+

Absolutely. We are constantly expanding our toolset. Feel free to reach out with your requests, and we might build it next!

About

An Interest-Only (I/O) Mortgage allows the borrower to pay only the interest for a set period (usually 5 or 10 years). The principal balance does not decrease during this time.

While this lowers the initial monthly payment, it leads to 'Payment Shock' once the I/O term ends, as the entire principal must then be repaid over the remaining years of the loan.

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