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Independent calculation workspace

Interest-Only Loan Calculator

Compare the interest-only payment and the higher payment after the interest-only period ends

Formula & sources
  • No signup
  • No lender matching
  • Runs in your browser
  • Replace defaults with your quote

Loan Details

Years you pay interest only

Full length of the loan

Interest-Only Payment
$2,333.33
Payment After 10 Years
$3,101.20

Interest-Only vs. Standard Loan

Interest-Only Loan

Initial Payment$2,333.33
Payment After IO Period$3,101.20
Total Interest$624,286.98

Standard Amortizing Loan

Monthly Payment$2,661.21
Payment (unchanged)$2,661.21
Total Interest$558,035.59

Your savings

Lower Early Payment
$327.88
Extra Interest Paid
$66,251.39

Payment Summary

Interest-Only Payment
$2,333.33
Payment When Principal Starts
$3,101.20
Payment Jump
$767.86
Extra Interest vs Standard Loan
$66,251.39

During the interest-only period your balance doesn't fall, so the payment jumps to about $3,101.20 once principal kicks in. Plan for that increase, and consider voluntary principal payments to soften it. Estimates only.

Use the tool

How to use this Interest-Only Loan Calculator

Enter the loan amount, rate, the length of the interest-only period, and the total term. The calculator shows the interest-only payment, the payment after that period, and the total interest versus a standard loan.

How the interest-only loan estimate works

Interest-only loans keep early payments low by deferring principal. The trade-off is a higher payment later and more total interest, since the balance stays put during the interest-only window.

Before you compare offers

Plan for the payment jump before it arrives. If you can, make voluntary principal payments during the interest-only period to soften the later increase and cut total interest.

Frequently Asked Questions

For an initial period you pay only the interest, so payments are lower but the balance does not fall. When that period ends, payments jump as you begin repaying principal over the remaining term.

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