# Interest-Only Mortgage Payment Calculator

### How much will my payments be with an interest-only mortgage?

Calculate the payment amount for an interest-only mortgage loan. An interest-only loan pays no principal in the early years of the loan then converts to a traditional amortized loan for the remainder of the mortgage length. The payments are lower during the interest-only period since no principal is being paid. The payment goes up sharply after the interest-only period since you must pay the balance of principal plus interest during the remaining loan years. Enter your sale price, any down payment you’re making, the length of the loan, and the points and closing costs. Then enter the interest rates, lengths, and any additional principal amounts you plan to pay each month for the interest-only and amortized periods of the loan. This calculator will then show you the monthly payment amounts for the interest-only and amortized periods. It will also calculate the total amount of interest you will pay, the total amount of money you will spend over the life of the loan, and the anticipated payoff time. You can also display and/or print the full amortization schedule for your loan.

## Field Help

### Input Fields

Title: A title for these calculator results that will help you identify it if you have printed out several versions of the calculator.

Lender: The name of your potential lender. This field is not required but may help if you have printed out several loan scenarios.

Sale Price: The sale price for your property. (NOT the amount of money you plan to borrow.)

Down Payment: The amount of money you plan to put as a down payment on your property.

Length of Loan: How long you will pay on this loan. Also choose whether ‘Length of Loan’ is years or months.

Points: The number of points (or percentage of the loan amount) you’ll be paying to close this loan. Check ‘Roll into Loan’ if the cost of the loan points is being financed and included in the ‘Loan Amount’.

Other Closing Costs: Any other costs you’ll be paying during the closing of your loan. These might be costs like the appraisal, property taxes, property insurance, title insurance, realtor fees, etc. Check ‘Roll into Loan’ if your closing costs (not to include loan points) is being financed and included in the ‘Loan Amount’.

Interest Rate: The annual percentage rate you will pay for the interest-only portion of this loan.

Length: How long you will pay on the interest-only portion of this loan. Also choose whether this ‘Length’ is years or months.

Additional Principal: The additional amount you will pay each month during the interest-only period of the loan (over the required ‘Monthly Payment’ amount) to pay down the principal on your loan.

Monthly Payment Type: Since you are only required to pay interest during the interest-only period, if you enter an ‘Additional Principal’ amount, you may choose to continue having fixed monthly payments or you may choose to continue to pay only the monthly interest (meaning the payment amount will drop a little each month).

Fixed: Even though you are only required to pay interest, paying ‘Additional Principal’ will reduce the interest each month and also reduce the required payment each month. Select ‘Fixed’ if you want to continue paying the same amount each month. The calculations will then be based on continuing to pay the first month’s calculated payment each month.

Minimum: Paying ‘Additional Principal’ will reduce the interest each month and, since you are only required to pay interest, also reduce the required payment each month. Select ‘Minimum’ if you want to calculate payments based on paying interest plus ‘Additional Principal’ only each month.

Interest Rate: The annual percentage rate you will pay for the amortized portion of this loan.

Length: After the interest-only period, the rest of ‘Length of Loan’ is the amortized length.

Additional Principal: The additional amount you will pay each month during the amortized period of the loan (over the required ‘Monthly Payment’ amount) to pay down the principal on your loan.

### Output Fields

(Average) Monthly Payment: ‘Interest’ + ‘Additional Principal’ (if entered) to be paid each month during the interest-only period. Actual payment could include escrow for insurance and property taxes plus private mortgage insurance (PMI).

Total Principal: The total principal that will be paid during the interest-only period. (Will be zero unless ‘Additional Principal’ is paid during the interest-only period.)

Total Interest: The total interest that will be paid during the interest-only period.

Total Paid: The total amount that will be paid during the interest-only period.

Number of Payments: Total number of payments during the interest-only period.

(Average) Annual Cost: The amount you will pay each year of the interest-only period.

Monthly Payment: ‘Principal’ + ‘Interest’ + ‘Additional Principal’ (if entered) to be paid each month once the interest-only period has passed and the loan has converted to a fully amortized loan. Actual payment could include escrow for insurance and property taxes plus private mortgage insurance (PMI).

Total Principal: The total principal that will be paid during the amortized period.

Total Interest: The total interest that will be paid during the amortized period.

Total Paid: The total amount that will be paid during the amortized period.

Number of Payments: Total number of payments during the amortized period.

Annual Cost: The amount you will pay each year of the amortized period.

Loan Principal Amount: ‘Sale Price’ – ‘Down Payment’ + ‘Points’ (if rolled into loan) + ‘Other Closing Costs’ (if rolled into loan).

Total Interest: Total amount of interest you will pay over ‘Length of Loan’.

Total Paid: Total amount of principal + interest you will pay over ‘Length of Loan’.

Payoff Time: Amount of time until the loan is paid off.

Total Number of Payments: The number of payments you will make to pay off the loan.

Average Annual Cost: The amount of money you will pay each year for this loan.

Points Amount: The points percentage applied to the amount you borrow gives the dollar amount the loan points will cost.

Total Property Cost: Total cost of this property when you include the ‘Sale Price’, ‘Points Amount’, ‘Other Closing Costs’ and the ‘Total Interest’ to be paid on the mortgage.