Interest Only Payment Calculator
Calculate the interest-only payment on a loan balance, then see what a later amortizing payment could look like on the same principal. Click any i for detail.
Your loan
Principal ($)
i
Principal
Loan balance during the interest-only period. |
|
|---|---|
APR (%)
i
APR
Annual interest rate. |
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Interest-only period (years)
i
IO period
How long you expect to pay interest only. |
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Later amortizing term (years)
i
Amort term
Assumed term if you later amortize the same balance. |
How to use this calculator
- Enter principal and rate.
- Set the IO period length.
- Set a later amortizing term for comparison.
- Read IO payment and future amortizing payment.
Results explained
The headline is the interest-only monthly payment. The breakdown shows IO-period interest and a later amortizing payment if principal is unchanged.
Quick reference: interest-only basics
What changes in an IO period.
| Item | During IO |
|---|---|
| Principal | Usually unchanged if you pay IO only |
| Payment | Balance × APR ÷ 12 |
| After IO | Payment often resets to amortizing P&I |
Some products recast or require principal paydown — check your note.
How the estimate is built
IO payment = principal × APR ÷ 12. Later payment uses standard amortization on the same principal.
Example scenario
A $300,000 balance at 6.5% is $1,625/mo interest-only. After 5 years of IO, amortizing that same balance over 25 years is a much higher payment.
FAQ
Does IO build equity?
Not from principal paydown — only if the asset appreciates.
Negative amortization?
Not in this simple IO model; you pay full interest each month.