Interest Only Loan Calculator
Compare the two phases of an interest-only loan side by side. See the lower markup-only payment first, then the higher payment once principal kicks in - with total interest shown, so the payment shock never catches you off guard.
Monthly Payment (interest-only phase)
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Monthly Payment (after IO phase)
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Interest Paid in IO Phase
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Total Interest Over Full Term
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How to use
- Enter the loan amount and annual rate.
- Enter the interest-only period and the total term in years.
- Compare the monthly payment of both phases — the second phase payment is always higher because the principal is also included.
- Look at the total interest and plan your cash flow around it.
Tips
- The second-phase payment is always higher - budget for it from day one, not when it starts.
- During the interest-only phase the principal never shrinks, so you build no equity by paying.
- Compare total interest across different loan terms; a longer term can cost far more overall.
- If your income is seasonal, plan a savings buffer before the principal phase begins.
Note
In the interest-only phase the principal does not reduce at all, so the later payment jumps up suddenly. Prepare for that payment shock in advance.