How the Interest-Only Calculator Works

It estimates payments on an interest-only mortgage during the interest-only period and the higher fully-amortizing payment that begins once principal repayment kicks in.

How It Works, Step by Step

During the interest-only period the calculator charges only the monthly interest, with no principal reduction. After that period it amortizes the full balance over the remaining term, producing a noticeably higher payment.

Interest-only loans appear most often in Florida's luxury and investment markets, where buyers may prefer lower carrying costs or expect to sell within a few years. Because the strategy depends on appreciation or a future payoff, weigh it against the state's insurance costs, which you owe regardless of how the loan is structured.

Want the underlying math? See the interest-only formula page, or open the calculator to try it with your own figures.