Free Calculator · Updated October 2026
Compare an interest-only mortgage with a standard loan: the lower payment you get now, the higher payment when the interest-only period ends, and the extra interest you pay for the flexibility.
Estimates only, not a loan offer or commitment. Rates, terms and eligibility depend on credit, property, income and lender guidelines. Save Financial, NMLS #377740, DRE #01875766.
During the interest-only (IO) period, usually 5, 7 or 10 years, your payment covers interest only and your balance does not go down unless you pay extra. When the IO period ends, the full balance is paid off over the remaining years, so the payment jumps.
IO payment = loan amount × rate ÷ 12
The calculator shows both payments, the jump between them, and the total interest compared with a regular 30-year loan. Add an extra principal amount to see how voluntary payments shrink the later payment.
| 10-year interest-only | Regular 30-year | |
|---|---|---|
| Payment, years 1–10 | $8,438 | $9,729 |
| Payment, years 11–30 | $11,405 | $9,729 |
| Total interest | About $2.25 million | About $2.00 million |
At an assumed 6.75% (example only), interest-only saves about $1,291 a month for ten years, then costs about $1,677 a month more than the regular loan for twenty years.
Interest-only is mostly offered on jumbo and non-QM loans, including bank statement loans for self-employed borrowers. Qualifying is usually based on the higher, fully amortizing payment.
The payment increase at the end of the IO period can be large, and if home values fall you build no equity from payments alone. Have a plan to sell, refinance or absorb the higher payment before the IO period ends, and consider making principal payments when cash flow allows.
Multiply the loan balance by the annual rate and divide by 12. A $1,500,000 loan at 6.75% has an interest-only payment of $8,438 a month.
The remaining balance is paid off over the rest of the term, so a 30-year loan with 10 years interest-only repays principal over 20 years and the payment rises.
Usually yes in total interest, because the balance stays higher for longer. Paying extra principal during the IO period reduces the difference.
Yes, mainly through jumbo and non-QM lenders, including bank statement and DSCR programs, typically with strong credit and larger down payments.
Most qualify you on the fully amortizing payment after the IO period, not the lower initial payment.
No. It is an estimate for planning only.
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We shop jumbo and non-QM lenders that offer interest-only terms, including for self-employed borrowers.