Loan Types
Interest-Only Calculator
Compare your interest-only payment vs. what you'll pay once principal amortization kicks in, and the total interest cost of each.
Loan Details
Payment Breakdown
Interest-Only Payment
$2,792/mo
Years 1-10
Amortizing Payment
$3,787/mo
Years 11-30
Fully Amortizing (comparison)
$3,226/mo
Same rate, 30 years
IO Loan Total Interest
$743,873
Fully Amort. Total Interest
$661,500
Extra Interest (IO cost)
$82,373
IO Loan Questions?
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Interest-only loans can make sense for investors and high earners with variable income. Get personalized guidance.
IO Loan Facts
No equity built during IO period
During the interest-only period, your entire payment goes to interest. Your loan balance doesn't decrease.
Payment shock risk
When the IO period ends, your payment jumps significantly because you're now paying P&I on the full balance in fewer years.
Best use cases
Short-term holds, high-income borrowers with variable income, or buyers who will sell before the IO period ends.
How the interest-only calculator works
This tool compares an interest-only payment against a fully amortizing one. The interest-only figure is the loan balance times the annual rate divided by 12, covering interest alone with no principal. The amortizing figure repays the loan over its full term, so it is higher but steadily reduces what you owe.
On a $500,000 loan at 7 percent, interest only runs about $2,917 a month. A fully amortizing 30-year payment is roughly $3,327, about $410 more each month. The tradeoff: after a 10-year interest-only period you would have paid around $350,000 in interest and still owe the full $500,000 as an example.
Interest-only terms appeal to South Florida buyers with variable income or those holding a property short term before resale. The lower payment frees cash now, but you build no equity during that window and face a payment jump when amortization begins. It works best when you have a clear plan to sell or refinance first.