Interest-Only Loan Calculator
Interest-only payment vs. full amortizing payment.
Enter your values
Enter the loan amount in $.
Enter the interest rate in % APR.
Enter the interest-only period in years.
Enter the total loan term in years.
Results update instantly as you type — no submit needed. Your values are remembered on this device, and the shareable link reopens the calculator with exactly these numbers.
- Interest-only payment
- $2,166.67
- Payment after IO period
- $2,982.29
- Payment increase
- $815.63
- Principal paid during IO
- $0.00
Quick answer
During the interest-only period you pay only interest each month; once that period ends, the payment jumps because the remaining balance amortizes over a shorter time.
IO payment = P x r/12; post-IO payment amortizes full balance over remaining term
At a glance
| What it does | Interest-only payment vs. full amortizing payment. |
|---|---|
| Category | Finance |
| Inputs needed | Loan amount, Interest rate, Interest-only period, Total loan term |
| Main output | Interest-only payment |
| Formula | IO payment = P x r/12; post-IO payment amortizes full balance over remaining term |
| Cost | Free — no sign-up, no download |
How to use the Interest-Only Loan Calculator
- 1Enter the loan amount, rate and interest-only period length.
- 2Compare the IO payment to the fully amortizing payment that follows.
- 3Plan for the payment jump — no principal is reduced during the IO period.
Inputs explained
- Loan amount($)
- Enter the loan amount in $.
- Interest rate(% APR)
- Enter the interest rate in % APR.
- Interest-only period(years)
- Enter the interest-only period in years.
- Total loan term(years)
- Enter the total loan term in years.
Worked example
Using the values the calculator loads with:
Inputs
- Loan amount400000 $
- Interest rate6.5 % APR
- Interest-only period10 years
- Total loan term30 years
Results
- Interest-only payment$2,166.67
- Payment after IO period$2,982.29
- Payment increase$815.63
- Principal paid during IO$0.00
Frequently asked questions
Do I build equity during the IO period?
Only through market appreciation, since none of the payment reduces principal.
Who uses interest-only loans?
Often investors seeking lower short-term cash outlay, or buyers expecting rising income or a sale before the IO period ends.
What do I need to enter into the Interest-Only Loan Calculator?
Just 4 values: loan amount, interest rate, interest-only period, total loan term. Every field starts with a realistic example, so you can change one number at a time and watch the result update instantly.
How does the Interest-Only Loan Calculator work out the answer?
During the interest-only period you pay only interest each month; once that period ends, the payment jumps because the remaining balance amortizes over a shorter time. It applies the formula IO payment = P x r/12; post-IO payment amortizes full balance over remaining term and shows the working so you can check each step by hand.
Is the Interest-Only Loan Calculator free, and do I need an account?
It is completely free with no sign-up, no download and no usage limit. Everything is calculated in your browser, so the numbers you type never leave your device.
Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.