Interest Only Calculator | HomeMortgage.com

Extra Payment Interest Only Mortgage Calculator

The Interest Only Calculator can be used by homeowners to find out if an interest only mortgage is what's right for them. When one sets out to acquire a home mortgage loan, they are usually offered two different types. It's important to figure out ahead of time which will benefit you most in the long run.

Why go interest only instead of a standard mortgage?

Monthly rates can be significantly lowered when homeowners make payments exclusively towards interest, excluding all other monthly fees; however, there is something more to keep in mind -- with an interest only mortgage, while you may save each month, you will eventually have to pay the principal amount at a later date. Despite this, an interest only mortgage could still save you more money long-term.

How to Use the Interest Only Calculator

In order to use this utility to help you decide between a standard loan and an interest only mortgage, in addition to submitting the loan amount and length, the interest-only rate and conventional loan rate must be added. Once this information has been added, one can directly compare the two amounts and see which plan will save them more money. With home mortgage calculators and tools like these, HomeMortgage.com is here to provide homeowners with the means to feel at home with their loan.


Input Information
Loan Information
Amount : ($)
Interest Rate : (%)
Length : (Years)
Additional Payment : ($)
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Financial Analysis (Switch to Plain English)
  Interest-Only With Additional Payment
Average Monthly Payment : $1,041.67 $1,054.27
Months Paid : 360 360
Total Monthly Payments : $375,000.00 $379,537.50
Total Interests Paid : $375,000.00 $361,537.50
Interest Savings : $13,462.50
Balance : $250,000.00 $232,000.00
Equity Appreciation $0.00 $18,000.00
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If you take out an interest only loan and then make additional payments, you might be able to save yourself some money over the long haul. If you take out a 30 year loan for $250,000.00 with a 5.000% interest rate, for example, the monthly payment would be about $1,041.67. This means you will pay $375,000.00 in interest at the end of the loan term.

If you pay an extra $50.00 per month, however, your average monthly payment will not be much more, only $1,054.27. At the end of the loan period, you will have paid $361,537.50 in interest. Since your extra payment will get your interest paid off sooner, you will save $13,462.50 in interest by paying an extra $50.00 each month. This will reduce the balance of your $250,000.00 loan to $232,000.00, which will result in $18,000.00 in loan appreciation.

DISCLAIMER: There is NO WARRANTY, expressed or implied, for the accuracy of this information or it's applicability to your financial situation. Please consult your own financial advisor.