Interest-Only Mortgage Calculator
Calculate interest-only mortgage from your own entered figures.
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Currency: Amounts are calculated in the currency you select; this site does not convert between currencies and does not use live exchange rates.
What this tool does
Calculate interest-only mortgage from your own entered figures. Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
How to use the Interest-Only Mortgage Calculator
- Enter or select loan amount.
- Enter or select annual interest rate (%).
- Enter or select interest-only period (years).
- Enter or select total term (months).
- Read the calculated result; change any measurement to compare alternatives.
Formula
during the interest-only period the payment is balance × rate/1200 and the balance never falls; afterwards the full balance amortizes over the remaining months
- loan
- Loan amount
- rate
- Annual interest rate (%)
- ioYears
- Interest-only period (years)
- termMonths
- Total term (months)
Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
Worked example
For interest-only mortgage calculator, the following measurements illustrate the exact method: Loan amount: 400000; Annual interest rate (%): 6.5; Interest-only period (years): 10; Total term (months): 360.
Inputs
- Loan amount$400000
- Annual interest rate (%)6.5 %
- Interest-only period (years)10
- Total term (months)360
Result
- Interest-only monthly payment$2,166.67
- Payment once amortization starts$2,982.29
- Payment jump when amortization starts$815.63
- Interest during the IO period$260,000.00
- Interest during repayment$315,750.21
- Total interest$575,750.21
- Balance when amortization starts$400,000.00
Results explained
- Interest-only monthly payment
- Interest-only monthly payment from the formula above. Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
- Payment once amortization starts
- Payment once amortization starts from the formula above. Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
- Payment jump when amortization starts
- Payment jump when amortization starts from the formula above. Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
- Interest during the IO period
- Interest during the IO period from the formula above. Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
- Interest during repayment
- Interest during repayment from the formula above. Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
- Total interest
- Total interest from the formula above. Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
- Balance when amortization starts
- Balance when amortization starts from the formula above. Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
Frequently asked questions
during the interest-only period the payment is balance × rate/1200 and the balance never falls; afterwards the full balance amortizes over the remaining months
Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.
No. All numbers are entered by you or come from the dated reference table shown on this page; calculations run locally.
This is an estimate, not financial, tax or legal advice. Verify the inputs and output with official sources and a qualified professional.
Check period consistency, currency, percentage inputs and the assumptions: Fixed rate across both phases. Many IO loans are ARMs whose rate resets near the end of the IO period; model a rate change by re-running the repayment phase with the Loan Calculator.