Interest-Only Mortgage Calculator

Calculate interest-only mortgage payments and see the payment jump when amortization begins. Compare to standard mortgages.

Loan Amount

Interest Rate (%)

Interest-Only Period

Period where you pay only interest, not principal

Total Loan Term

Interest-Only Payment

Years 1–10

$1,516.67

Fully Amortized Payment

Years 11–30

$2,087.60

Payment Jump

+$570.94

Total Interest (IO)

$403,025.15

Standard 30yr Payment

$1,769.79

Extra Interest vs Standard

$45,900.58

⚠️ Payment Shock Warning

Your payment will jump by $570.94 after the interest-only period ends. Make sure you can afford the higher payment. You'll also pay $45,900.58 more in total interest compared to a standard 30-year mortgage.

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Interest-Only: Lower Payments, Higher Risk

Interest-only mortgages offer significantly lower initial payments, but come with a substantial payment increase later. Our calculator shows both phases so you can plan ahead and avoid payment shock.

The True Cost of Interest-Only

Because you're not paying down principal during the IO period, you pay more total interest over the life of the loan. Our calculator compares total interest to a standard amortizing mortgage so you see the exact cost difference.

Frequently Asked Questions

What is an interest-only mortgage?

An interest-only mortgage lets you pay only the interest for an initial period (typically 5-10 years). After that, the loan converts to fully amortizing payments covering both principal and interest, causing a significant payment increase.

Who should consider an interest-only mortgage?

Interest-only loans may suit buyers who expect income increases, plan to sell before the amortization period, or want maximum cash flow flexibility. They're riskier because you don't build equity during the IO period.

How much does the payment jump after the interest-only period?

Payments can increase 50-100% when the interest-only period ends, because you're now paying the full principal over a shorter remaining term. This 'payment shock' is the biggest risk of IO mortgages.