Our interest only home mortgage payment calculator will automatically calculate payments as well as compare interest only to standard mortgage principal and interest payments. Know what you can to make better financial decisions.
Statistics from the National Bureau of Economic Research show that 1 in 6 American homeowners hold a interest only mortgage. This option can offer many advantages depending on your situation, and our calculator can help you view the numbers so you can make better financial decisions and choose the type of mortgage that is best for you.
With a conventional mortgage, homeowners are expected to make a monthly payment that includes a portion of both the interest and the principal.
However, with an interest only mortgage, borrowers will pay only the interest that is accrued on the principal balance for a set amount of time, typically ranging from 3 to 10 years.
With an interest only type of mortgage, you will not have to pay any principal for the duration of the term, unless you choose to do so.
However, if you make only the interest payments, the principal balance will remain unchanged and you will still owe the same amount on your home at the end of the Interest Only term as you did at the beginning.
Therefore, it is recommended that you try to use any extra money to pay down the balance when possible, as this can make a significant difference throughout the duration of your loan.
Interest only mortgages are an ideal option for those who have a fluctuating income or depend on bonuses and commissions as it allows for lower monthly payments while also providing the flexibility of making lump sum installments on the balance when the money is available.
This type of mortgage is also a great choice if you expect a future salary increase, a reduction in other debt (paying off loans or credit cards which will free up money), an increase in your home’s value, or if you plan to invest the payment difference and use the profits to pay down the balance. In today’s current market, many homeowners are also choosing an interest only mortgage as a short-term solution to avoiding foreclosure.
I am in the market for buying a house and as a first-time homebuyer, I’m scared of what I’m getting myself into.
I always hear that buying a home is almost better than renting an apartment solely based on the equity you’re creating and how you’re not throwing money away.
I’m happy to have found debtsteps.com’s mortgage payment calculator, because it’s really helping me see what is in my true price range, and what I can afford, despite what I’m being offered by the banks.
The application is so smooth and simple to use, and once you have an idea of how much your loan is, and what other added costs might be bundled up in your mortgage, you’re good to go and in business.
My wife and I are considering putting an offer on a house, but we’re not sure about how much to put down in a down payment or how much of a loan we should really take out from the bank. After using this simple service for calculating how much my loan, taxes, homeowner’s insurance and PMI will cost, we learned that we can in fact afford the house we want, so we’re going to put an offer on it today.
I can thank debtsteps.com’s mortgage payment calculator for helping me further my dream of owning my own home. You can do it too, just be smart and use this calculator!
Posted by: Jim
Keep in mind,though, that you will have to pay the principal eventually, and over time, it could end up costing you a lot more in interest, depending on how disciplined you are in making extra payments. Also, if your property value goes down, you could end up owing more on your home than it is worth.
Interest only mortgages offer lower monthly payments and may be a wise choice for short-term periods. By using this Interest Only Mortgage Payment Calculator, you can find the payment difference between an interest-only mortgage and a principal-interest mortgage so you will be able to make an informed decision for your financial situation. If you will be including your real estate taxes and insurances in your mortgage payment, the interest only mortgage payment calculator also has fields for entering those figures so you can see your total monthly payment amount.
The calculator is very straightforward, fill in the blanks. The reset button allowed me to change my numbers for different results, and there is also an option for printing a hard copy to evaluate away from the PC. The design of the calculator allows the end user to make changes so they can see all sides and options that they may want to consider, especially when deciding between two different styled mortgages.
Posted by: Jamie
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- Using Debt Income Ratios In Debt Management
- The Financial Community’s Recommended Budgeting Guidelines
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