Interest-Only Mortgage Calculator
See your interest-only payment, compare it to a fully amortizing loan, and understand what happens when the interest-only period ends.
Loan Details
Enter your loan amount and terms
Interest-Only Payment
During the IO period
Same loan amount and rate — different payment structure
| Metric | Interest-Only | Fully Amortizing | Difference |
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Loan Timeline
Visual breakdown of your interest-only period vs. the remaining amortization period
How Interest-Only Loans Work
With an interest-only loan, your monthly payment during the initial period covers only the interest charged on the loan — none of it goes toward paying down the principal balance. This results in a significantly lower monthly payment compared to a traditional fully amortizing loan.
Once the interest-only period ends, the loan converts to a fully amortizing schedule for the remaining term. Because the principal hasn't been reduced and the remaining time is shorter, the new payment is meaningfully higher than what a traditional loan payment would have been from day one.
Interest-only structures are common among real estate investors who want to maximize cash flow during a hold period, borrowers expecting a near-term increase in income, or those planning to sell or refinance before the IO period ends.
Important: Because no equity builds through principal paydown during the IO period, these loans carry more risk if property values decline. Talk with our team about whether this structure fits your specific strategy.