What is an interest-only mortgage?

An interest-only mortgage is a loan where you pay only the interest for a set period, typically 5-10 years. Your monthly payments are lower because you're not paying down the principal. After the interest-only period ends, payments increase to include principal, or you may need to refinance or pay off the balance.

How do I calculate interest-only mortgage payments?

To calculate, multiply the loan amount by the annual interest rate, then divide by 12. For example, a $200,000 loan at 4% interest gives $200,000 × 0.04 = $8,000 per year, or about $666.67 per month. This calculator does that for you.

What are the risks of an interest-only mortgage?

The main risk is that you don't build equity during the interest-only period. If property values fall, you could owe more than the home is worth. Also, when the period ends, your payments can increase significantly, which may be hard to afford.

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Interest-Only Mortgage Calculator.

Estimate interest-only payments, total interest, and balloon principal.

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Capital

Annual interest rate

Term

Monthly interest payment

1 500,00 $US

Total interest

180 000,00 $US

Principal due at maturity

300 000,00 $US

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Canonical URL: https://mathify.one/fr/finance/interest-only-mortgage

Cite as: Mathify. (n.d.). Interest-Only Mortgage Calculator. https://mathify.one/fr/finance/interest-only-mortgage

Use Cases

Estimate monthly interest costs

Quickly see how much you'll pay in interest each month for an interest-only loan, helping you budget and compare loan options.

Example: For a $300,000 loan at 3.5%, monthly interest is $875.

Compare interest-only vs. traditional mortgages

Use the calculator to see the lower initial payments of an interest-only loan versus a standard amortizing loan, so you can decide if the trade-off is worth it.

Example: Compare a $250,000 loan at 4%: interest-only payment is $833, while a 30-year fixed is about $1,193.

Frequently Asked Questions

What is an interest-only mortgage?: An interest-only mortgage is a loan where you pay only the interest for a set period, typically 5-10 years. Your monthly payments are lower because you're not paying down the principal. After the interest-only period ends, payments increase to include principal, or you may need to refinance or pay off the balance.
How do I calculate interest-only mortgage payments?: To calculate, multiply the loan amount by the annual interest rate, then divide by 12. For example, a $200,000 loan at 4% interest gives $200,000 × 0.04 = $8,000 per year, or about $666.67 per month. This calculator does that for you.
What are the risks of an interest-only mortgage?: The main risk is that you don't build equity during the interest-only period. If property values fall, you could owe more than the home is worth. Also, when the period ends, your payments can increase significantly, which may be hard to afford.

Tips & Common Mistakes

Tips

Enter the exact loan amount and interest rate to get an accurate monthly interest figure.
Remember that this payment covers only interest, not principal, taxes, or insurance.
Use this tool to plan for the end of the interest-only period, when payments will rise.
Check with your lender to confirm the interest-only period length and terms.

Common Mistakes to Avoid

Forgetting that the payment is only interest, not the full mortgage payment including escrow.
Using the interest rate as a decimal instead of a percentage (e.g., 4 instead of 0.04).
Assuming the payment stays the same after the interest-only period ends.

Last updated: August 13, 2026