Mortgage Payment Interest-Only Estimator
This estimator helps you understand monthly interest-only payments, the effect of an interest-only period followed by amortization, and the estimated total interest paid across both phases. It makes explicit assumptions and shows the sources of each calculation so you can validate the results against loan documents.
Use this tool to compare scenarios (short IO period vs longer IO period, or IO with a balloon) and to preview the payment shock when amortization begins. This tool does not replace lender disclosures or a formal amortization schedule provided by your lender.
Calculates interest-only payments for the IO period, then the amortized monthly payment required to fully repay the principal over the amortization period, and aggregates estimated interest.
Inputs
Advanced inputs
Amortization inputs
Results
Monthly interest-only payment
$1,125.00
Monthly payment after IO (amortization)
$1,667.50
Estimated total interest (IO + amortization)
$267,749.23
| Output | Value | Unit |
|---|---|---|
| Monthly interest-only payment | $1,125.00 | USD |
| Monthly payment after IO (amortization) | $1,667.50 | USD |
| Estimated total interest (IO + amortization) | $267,749.23 | USD |
Visualization
Methodology
Calculations assume interest-only payments during the interest-only period, meaning principal is not paid down during that phase unless stated otherwise.
Monthly interest-only payment is computed as principal multiplied by the monthly interest rate. For amortization after the IO period, the standard annuity amortization formula is applied to the remaining principal to compute the level monthly payment that fully repays principal over the amortization term.
This estimator follows best practices for software quality and data handling: use of scientific expression with explicit units, reproducible formulas, and recommendations for secure handling of personal data consistent with NIST and ISO guidance. Outputs are estimates and should be verified against lender-provided amortization schedules.
Worked examples
Example 1: Principal $300,000, APR 4.5%, IO 5 years, amortization 25 years. The tool will show monthly interest-only payments for 60 months and the monthly amortizing payment required thereafter, plus estimated total interest.
Example 2: Principal $200,000, APR 3.8%, IO 3 years, balloon option selected. The tool will show monthly interest-only payments and the outstanding principal that becomes due at the balloon maturity.
Expert Q&A
Does the tool include taxes, insurance, or fees?
No. This estimator calculates interest and principal repayment only. Taxes, insurance, homeowner association fees, lender fees, and escrow are not included and must be added separately.
What happens if the interest rate is zero or changes over time?
The formulas assume a fixed interest rate for the entire schedule. If the rate is zero the amortizing payment reduces to principal divided by months. For adjustable-rate loans or varying rates, results are approximate and you should request an amortization schedule from your lender that reflects rate adjustments.
How accurate are the estimates?
Estimates are based on standard mathematical formulas and are subject to rounding and the assumptions you provide. They are not loan offers. Check lender disclosures for precise figures. For guidance on secure handling and quality controls, see the referenced standards.
Is this tool compliant with regulations?
This estimator provides informational calculations only. It is not a substitute for legally required lender disclosures. Use lender documents for regulatory compliance and consult a qualified professional for binding advice.
Sources & citations
- National Institute of Standards and Technology (NIST) — https://www.nist.gov
- International Organization for Standardization (ISO) — https://www.iso.org
- Institute of Electrical and Electronics Engineers (IEEE) — https://standards.ieee.org
- Occupational Safety and Health Administration (OSHA) — https://www.osha.gov