Interest-Only Calculator
Calculate your interest-only loan payments and compare with standard amortizing payments.
Interest-Only Loan Payment Calculator
See how much you can save with interest-only payments and understand the long-term costs
Understanding Interest-Only Loans
What is Interest-Only?
An interest-only loan allows you to pay just the interest for a set period, typically 5-10 years. Your payments are lower because you're not paying down principal. After this period, you pay both principal and interest.
How It Works
- IO Period: Pay interest only (lower payment)
- After IO: Pay principal + interest
- Remaining balance amortized over shorter term
- Results in higher payments after IO period
Best For
- Borrowers expecting income growth
- Short-term property owners
- Real estate investors
- Self-employed with variable income
- Those with disciplined savings habits
Important Considerations
- Plan for payment increase after IO
- Consider making voluntary principal payments
- Understand refinancing options
- Monitor home value vs loan balance
- Not ideal for long-term homeownership