David Chen is a Certified Financial Analyst with expertise in mortgage calculations.
Use this calculator to compute your monthly mortgage payments for an interest-only loan. Enter the loan amount, interest rate, and loan term to get your monthly payment.
Monthly Mortgage Payment Calculator (Interest Only)
Not calculated yet.
Formula
Monthly Payment = (Loan Amount × Interest Rate / 100) / 12
Formula Source: Investopedia
Variables:
- Loan Amount: The total amount of the loan.
- Interest Rate: The annual interest rate of the loan.
- Loan Term: The total number of years for the loan.
Related Calculators
What is an Interest-Only Mortgage?
An interest-only mortgage allows the borrower to pay only the interest for a specified period, typically 5-10 years. After that period, the borrower begins paying off both principal and interest.
How to Calculate Monthly Mortgage Payment (Interest Only)
- Step 1: Enter the loan amount, interest rate, and loan term.
- Step 2: Click “Calculate” to compute the monthly interest payment.
- Step 3: The result will be displayed in the “Monthly Payment” field.
Frequently Asked Questions (FAQ)
What is an interest-only loan? An interest-only loan is a loan where, for a period, the borrower only pays the interest on the principal balance.
How long is the interest-only period? The interest-only period typically lasts for 5 to 10 years, depending on the terms of the loan.
Can I switch to a principal and interest loan? Yes, you can convert to a principal and interest loan after the interest-only period ends.