Interest-only mortgage calculator
Enter the loan amount, rate and interest-only period to see the interest-only payment and the interest paid in that period, then add the amortizing term to see the later payment, for your review of the loan file.
Runs in your browser. What you type isn't sent or stored.
Calculate an interest-only payment
Loan
There is no default rate.
Interest-only period
The years left to repay once interest-only ends.
How an interest-only payment is calculated
During the interest-only period, monthly payment = loan amount × annual rate ÷ 12. Total interest for the period = that payment × the number of interest-only months.
When the period ends, the full balance is amortized over the remaining term at the same rate, so the payment rises to cover principal and interest.
Worked example
- $400,000 at a 7% rate entered: $400,000 × 7% ÷ 12 = $2,333.33 a month interest-only.
- Over a 10-year interest-only period: $280,000.00 in interest.
- Then 20 years of amortization: $3,101.20 a month in principal and interest, +$767.87.
Round numbers for illustration only; the rate and terms are inputs, not defaults.
What this calculator doesn't do
- It's an estimate. It holds the rate fixed and leaves out taxes, insurance, mortgage insurance and fees.
- It doesn't model rate adjustments, prepayment or a balloon payment.
- It sets no rate or terms, and it doesn't make a lending decision. Every figure is the one you type.
Questions
How is an interest-only payment calculated?
Monthly interest-only payment = loan amount × annual rate ÷ 12. The balance stays the same during the interest-only period unless extra principal is paid.
How is total interest in the interest-only period worked out?
The loan amount × the annual rate ÷ 12 × the number of interest-only months, at the rate you enter and with the balance unchanged.
What happens when the interest-only period ends?
The full balance is then paid off over the amortizing term you enter, so the payment covers principal and interest. The calculator shows that payment and the change from the interest-only payment.
What should I enter as the amortizing term?
The years left to repay after the interest-only period, from the loan's terms. For example, a 30-year loan with 10 years interest-only has 20 years of amortization. There is no default.
Does it handle adjustable rates?
No. It holds the rate you enter fixed for both periods. If the rate can change at the end of the interest-only period, enter the rate you want to test for the later payment by running the figures again.
Is anything I type saved?
No. The figures are calculated in your browser, and what you type isn't sent or stored.
Not legal or tax advice.
Ready for the real statements?
Upload 12 or 24 months of PDFs. StatementReady checks whether each statement's transactions add up to its printed balances.
This tool assists your review of the loan file. The lender makes all underwriting decisions.
StatementReady isn't affiliated with or endorsed by Fannie Mae or any lender named here.