InterestOnly Mortgage Calculator
After practically disappearing during the Great Recession, interestonly mortgages are making a comeback. For some borrowers, an interestonly mortgage can offer an attractive way to minimize their mortgage payments while preserving the option to make payments against loan principle when they wish. This InterestOnly Mortgage Calculator is designed to help you figure out the costs and payments associated with an interestonly mortgage. It will show you how much you can reduce your loan balance by making additional payments and the interest you can save by doing so. Enter your information in the fields below, then using the sliding controls to experiment with how changing your prepayments, interest rate, length of interestonly period, etc. to see how they affect your results.
Loan information:Press spacebar to hide inputs 
Prepayments:

Total Payments $362,223

Mortgage Term 30 years

You can get a fair estimate of how much interest you'll be paying on your mortgage when you make use of our mortgage calculator. Payment in interestonly mortgages tends to vary with a host of factors; these alterations in interest rates and costs are accounted for with the calculator tool.
An Interestonly Mortgage Calculator is what you need to figure out the total amount you'll be putting down when you take out an interestonly mortgage loan. The calculator will give you a vivid picture of the cost you will pay during the interestonly period as well as during the amortization phase of the loan.
To use the Mortgage Calculator to arrive at monthly payments, follow these steps in sequential order;
 Type in the total Mortgage Amount in its allotted box.
 Select the number of years you plan to take to pay the mortgage.
 Choose how long you want the interestonly period to last.
 Supply the interest rate on the mortgage.
 If there are any prepayments, feed in the details concerning nature and amount to be paid.
After giving these details, the calculator tool will respond with the monthly payment you would make during the interestonly period, and the other payments to be made during the amortization phases of the loan.
The monthly interest on your mortgage will vary based on what phase you currently are in the loan's life. The interest paid during the interestonly phase is much less than that deposited during the amortization phase of the same loan. The best way to ascertain both early enough is to make use of the mortgage calculator provided above.
It is generally better to compute extra payments along with interest costs while using the interestonly calculator. This is because they will help you save in the long run. Little additional costs settled monthly in prepayment during the interestonly phase will save you a decent chunk of cash when you consider the total amount paid at the end of the day. The interestonly calculator is excellent because it tells you how much you’ll save when you make some modifications to your extra payment.
How long it takes you to pay up the mortgage loan affects the cost you'll be paying. To know how much the loan duration will alter the monthly cost of a mortgage loan, try out the mortgage calculator. Not only does it tell you how much you'll be paying with a specific loan duration, but it also clarifies how much you'll save by tweaking the life of the loan a bit.
Your amortization schedule has a direct impact on your monthly and overall mortgage payments. One of the parameters you feed into the Calculator is the length of the interestonly period. You can also state how you want the Calculator to report the amortization, either monthly or yearly. The Calculator does well to express monthly and overall patent as a function of the interestonly period.
In an Interestonly Mortgage, During the initial period, you'll be required to pay interest only. That changes during the amortization phase, where the borrower must make a payment on both interest and loan principal. However, the mortgage calculator keeps you abreast of whatever expenses you'll be making even before you take the loan.
To calculate a 10year interestonly mortgage, you need to make use of an Interestonly Mortgage Calculator. To use the Calculator effectively, you will need to feed in detail about the Mortgage amount, loan term, and interest rate while setting the interestonly period to 10 years on the Calculator.
It depends on which point in the amortization schedule you currently are at. You are only required to take care of the interest during the initial phase in an interestonly loan. Once that phase elapses, you begin to bear the cost of the loan principal. It is possible to know how much you'll be paying at any point in these two phases. Using the interestonly calculator on this page, you'll get a fair idea of what to expect monthly.
How to use the InterestOnly Mortgage Calculator
Here's how it works:
 Use the slider to set your intended mortgage amount, or just type it into the box
 From the dropdown list, select the number of years you believe you will need to pay off your mortgage
 Choose the number of years that will make up the Interest Only phase of the mortgage repayment plan, and the Interest rate
 Click Prepayments to input any additional payments you plan to make during the Interest Only phase.
When you click Calculate, you will see what your monthly payments will be during the initial, interestonly phase of the loan. Then, click View Report to see how your repayment plan will look throughout the duration of your mortgage. This will include the projected increase during the amortization phase of the mortgage, as you begin paying down the loan principal.
About interestonly mortgages
As the name indicates, an interestonly mortgage is one where you only pay the interest charges. You don't have to make any payments against the loan principle, at least not initially. However, after a certain length of time, often 510 years, you do have to begin paying down the balance on the loan. An interestonly calculator like this one can help you predict what those payments will be.
Interestonly mortgages offer some significant advantages for the right kind of borrower. By requiring only minimal monthly payments, they're a good choice for borrowers who don't want to tie up a lot of money in a mortgage or for borrowers who want the flexibility to pay more or less each month as their finances allow. But you do have to begin making payments against principle eventually, so you need to plan accordingly.
Here are some examples of the type of borrower who might benefit from an interestonly mortage:
 Someone who only plans to stay in the home a few years before moving on, so they don't want to tie up a lot of money in a mortgage
 A borrower with an irregular income, such as from a seasonal business, so they wish to be able to minimize payments when they wish, then make payments against loan principle when they are able to
 A young person with a limited income now, but who has a high degree of confidence they will be earning much more in the near future, such as a medical student.
 Financially sophisticated borrowers who would rather invest their money elsewhere rather than building home equity
Someone for whom an interestonly mortgage might not be a good choice? A firsttime homebuyer who can't afford a full house payment or a repeat buyer trying to stretch their money to buy a more expensive home than they can really afford. Eventually, those loan principle payments are going to come due with a potentially big increase in monthly mortgage payments, and you have to be prepared for them.
That's why it's helpful to have a tool like this interestonly mortgage calculator. It allows you to anticipate what your mortgage payments will be and how much you can reduce them by making additional payments against principle during the interestonly phase.
Can you still get an interestonly mortgage?
Interestonly mortgages were popular in the early 2000s, along with other types of creative financing. Unfortunately, they were frequently marketed in ways that made them risky, such as requiring little to no down payment or marketing them to borrowers who were illprepared to handle principle payments once the interestonly phase ended. This caused many to get into financial difficulty when home values fell and they had no cushion of equity to fall back on.
But interestonly mortgages have been around for a long time, and can be a sensible option for borrowers who are prepared for the end of the interestonly phase. And there are more safeguards in place these days to ensure that borrowers are qualified for an interestonly loan.
These days, most lenders require a down payment of 2030 percent on for an interestonly mortgage, so there's an equity cushion if home values fall. You'll also need a decent credit score, about 660 or higher, in most cases. Most lenders will also want to ensure that you'll have adequate income to cover the principle payments when that time comes.
Notes on the InterestOnly Mortgage Calculator
This Interest Only Mortgage Calculator will work out your payments for both phases of an interestonly mortgage: both interestonly and full amortization, the latter being when you're paying both interest and principle. These calculations are based on your loan amount, interest rate, the loan term (length) and the length of the interestfree period.
You can also use the interestonly calculator to determine the effects of making prepayments against mortgage principle during the interestonly phase. The calculator will show you how much faster you can pay off the loan by making prepayments, as well as how much interest you can save by doing so.
For example, on a $250,000 mortgage amortized (repaid) over 30 years with the first 10 years interestfree, with a 4 percent mortgage rate, you could save almost $36,000 in interest by paying an extra $200 a month during the interestonly phase.
The calculator's amortization table can also show you how much equity you can build up by making prepayments. This is helpful if you think you may relocate or refinance before the end of the prepayment phase.
Who might use this calculator?
An interestonly mortgage calculator is useful for a variety of situations, including the following;
 Are thinking of an interestonly mortgage but want to see how the costs will play out
 Figuring out what your monthly payments will at different stages of the loan
 Seeing the effects of prepayments on how much interest you'll pay over the life of the loan
 Calculating how varying the length of the interestonly period affects your loan payments later on
 Want to see how much faster you can pay off your loan by making prepayments
Why is the total interest higher than that of a standard mortgage?
The total interest paid is higher on interestonly mortgages because during the first phase of the loan, you're not reducing the loan principle (unless you make prepayments). And if you're not paying down the principle, you're still paying interest on the full amount of the loan each month. So 4% of $250,000 is the same in the first year of the term as it is in the fifth, unless you make prepayments.
I have my results – now what?
Once you have your results, the next step is to start getting personalized quotes from lenders to see what sort of rates they're offering and see if you prequalify. An easy way to do it is through our Get a FREE Quote option. Answer a few simple questions and have the lenders come to you, rather than you looking for them.
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