Interest-Only Loan Calculator
An interest-only (I-O) loan has an initial period where your payments only cover the interest, not the principal. This results in lower initial payments.
Payment Shock:After the I-O period ends, your payment will increase significantly because you must start paying back the principal over a shorter remaining term. This calculator shows you the difference between the two payment amounts.
Interest-Only Payment:
$$ M_{IO} = P \times r $$
Principal & Interest Payment (after I-O period):
$$ M_{PI} = P \frac{r(1+r)^{n_{rem}}}{(1+r)^{n_{rem}} - 1} $$
Where:
P = Principal loan amount
r = Monthly interest rate
nrem = Remaining number of payments
This calculator is for informational purposes. It does not account for taxes, insurance, or variable interest rates. Be sure you can afford the higher P&I payment before taking an I-O loan.
Calculate payments during and after the interest-only period.