Interest-Only Calculator

Interest-only is a tricky kind of mortgages. First of all, an interest-only mortgage does not really buy you anything, as it does not pay any principal off. On the other hand, for that particular matter, it requires lower monthly payments, which can be quite helpful.

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Loan Information
Amount : ($)
Interest-Only Rate : (%)
Conventional Loan Rate : (%)
Length : (Yrs)
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Financial Analysis (Switch to Plain English)
Interest-Only Loan Payment : $989.58
Total Interest-Only : $356,250.00
Monthly Principal & Interests : $1,342.05
Total Principal & Interest : $483,139.46
Plain English Help (Switch to Financial Analysis)

An interest only mortgage makes your monthly payments lower, but it does not really buy you your home - a standard mortgage does, but at the price of higher monthly payments. With an interest only mortgage your monthly payments cover only the interest, but you are expected to eventually repay the principal anyway. This calculator will help you to compare the two types of loans and decide which one is best for you.

If you borrow $250,000.00 for the purchase of your home, you may be offered a standard loan with a 5.000% interest rate or an interest only loan with a 4.750% interest rate, both of them being 30-year loans. With an interest only loan, your monthly payment will be $989.58, while a standard loan will be $1,342.05. Under this plan, the total interest only cost will be $356,250.00, while the total standard loan cost will be $483,139.46.