Interest Only Mortgage Calculator
See both sides of an interest-only mortgage: your lower payment during the interest-only period, and the higher fully-amortizing payment once it ends. Interest-only loans are common on jumbo and portfolio products in NYC, where the payment jump at the end of the IO period is worth planning for.
See our Mortgage Amortization Calculator for a standard loan, or all our calculators.
Glossary
A loan where your payment covers only accrued interest for a set period (commonly 5–10 years), with none of it reducing principal. Your balance stays exactly the same during that period — you’re not building equity through paydown, only through appreciation.
Once the interest-only period ends, the same principal balance must now be fully paid off over the shortened remaining term instead of the original full term — so the new payment is calculated over fewer years, which is why it’s meaningfully higher than a standard amortizing payment would have been from day one.
Common among jumbo borrowers, investors prioritizing cash flow, and buyers expecting a near-term income increase or sale before the IO period ends. Less common (and more heavily scrutinized) for owner-occupied primary residence financing since 2008-era reforms.
Only through market appreciation, not paydown, during the interest-only period. If prices are flat or fall, an interest-only borrower has no principal cushion the way a standard amortizing borrower would at the same point in the loan.