Interest only mortgage calculator 2026
An interest-only mortgage can keep initial payments lower by covering interest for a set period, with principal repayment deferred. This page estimates principal-and-interest totals and shows how the balance and payment can change once amortization begins.
Estimates only. Loan terms and approval depend on lender underwriting.
Interest Only Mortgage Calculator
Mortgage Result
Enter loan details to calculate.
How it works
The calculator models a loan using standard amortization math to estimate monthly principal and interest, total interest paid, total paid over the term, and an amortization schedule. For an interest-only phase, scheduled payments cover interest while the principal balance does not decline; when the interest-only period ends, payments are recalculated to repay the remaining balance over the remaining term. Interest-only structures are treated as a payment feature that is subject to federal disclosure rules for certain mortgages under Regulation Z.
Examples
Example scenario: A loan may start with interest-only payments for an initial period, then convert to fully amortizing payments for the remainder of the term. During the interest-only phase, payments primarily reflect the interest rate and outstanding principal, while the balance stays largely unchanged. After conversion, the schedule shifts so that each payment includes principal reduction, increasing the payment amount compared with the interest-only period. This tool shows both phases in the schedule as an estimate based on the inputs you provide.
Limitations and important notes
Results are estimates of principal and interest using a simplified mathematical model. Actual loan terms depend on the lender, the note, and any product-specific features not modeled here. This calculator does not determine eligibility, does not provide a rate quote, and does not include mortgage insurance, funding fees, taxes, or closing costs. If you are considering an interest-only loan, review official consumer guidance such as the Consumer Financial Protection Bureau’s explanation of <a href="https://www.consumerfinance.gov/ask-cfpb/what-is-an-interest-only-loan-en-101/" target="_blank" rel="noopener noreferrer">interest-only loans</a>, which outlines how these products work and the associated risks.
FAQs
What is an interest-only mortgage?
It is a mortgage where scheduled payments may cover only interest for a set period before switching to payments that include principal repayment. This calculator estimates principal and interest outcomes based on amortization math.
Do interest-only loans reduce the principal balance during the interest-only period?
Typically no. During an interest-only phase, payments are primarily interest and the principal balance generally does not decline until the loan converts to fully amortizing payments.
Are interest-only mortgages available through FHA, VA, or USDA programs?
Availability depends on the specific program guidelines and lender policies. Federal housing programs generally publish eligibility and product standards, and lenders determine which structures they offer within those rules. Borrowers should review current program documentation and confirm directly with a participating lender.
Does qualifying for an interest-only mortgage depend on the lender?
Yes. Federal consumer guidance notes that lenders set underwriting standards for interest-only loans and qualification depends on the lender’s criteria and your circumstances.
Calculations are simplified and for guidance only. Always double-check results and current rules with official sources or a qualified professional before making financial decisions.