Interest-Only Mortgage Calculator
Estimate the lower payment during the interest-only period and the higher payment that follows once principal amortization begins.
Interest-Only Payment
$2,250.00
Later amortizing payment: $3,041.46
Balance After Interest-Only Period
$400,000.00
Total Interest
$599,948.40
Total Payment
$999,948.40
How this interest-only mortgage calculator works
During the interest-only phase, the payment is based only on the outstanding balance and interest rate. Because principal is not being repaid, the balance remains unchanged until the loan converts to a standard amortizing structure.
Once that conversion happens, the calculator recomputes the monthly payment using the same remaining balance over the shorter leftover term. That is what creates the payment reset many borrowers underestimate.
When to be cautious with interest-only structures
Interest-only loans can improve flexibility early, but they leave less margin for error later. If income, home value, or refinance options change, the higher later payment may become much harder to absorb.
Use this page as a stress test. If the future amortizing payment looks uncomfortable today, it is usually a sign that the structure may be too aggressive for your budget.
Frequently Asked Questions
An interest-only mortgage lets you pay only interest for an introductory period. During that time, the principal usually does not fall, so the balance stays the same until the amortizing phase begins.