Interest Only Mortgage Payment Calculator Loan Amount: Interest Rate: Loan Term in Years: Payment: function calculateInterestOnlyPayment(){ var loanAmount = parseFloat(document.getElementById('loanAmount').value); var interestRate = parseFloat(document.getElementById('interestRate').value); var loanTermYears = parseInt(document.getElementById('termInYears').value); var ratePerPeriod = interestRate/12; var payment = loanAmount * (ratePerPeriod/(1-Math.pow((1 + ratePerPeriod),(-1*loanTermYears*12)))); document.getElementById("payment").value = payment.toFixed(2); } </script> <h2>What is an Interest Only Mortgage Payment Calculator?</h2> <p>An interest only mortgage payment calculator is an online tool designed to help potential and current homeowners determine what their monthly mortgage payments would be when committing to an interest only mortgage option. Interest only mortgages have proven beneficial for those who are expecting to be able to pay off their entire mortgage within a certain time frame, such as 8-10 years, but want to keep their monthly mortgage payments low. </p> <h2>What Benefits Does an Interest Only Mortgage Provide?</h2> <p>The main advantage of an interest only mortgage is that it allows a borrower to pay only the interest of the loan in the initial years of the mortgage. This benefits borrowers who can afford to pay more than the minimum amount required each month but don't necessarily have the desire or ability to pay off their loan principal in the near future. With the lower monthly payments, borrowers may be able to use the extra money to invest elsewhere or save up for a large purchase.</p> <h2>How Does an Interest Only Mortgage Payment Calculator Work?</h2> <p>Using an interest only mortgage payment calculator is relatively straightforward. The user simply enters in the mortgage details such as the loan amount, interest rate, and length of the loan. Then they enter in how many years they plan on making interest only payments. This number will typically not exceed 10 years. The amount of the monthly payment is then provided as an estimate.</p> <h2>What Costs Should Borrowers Be Aware Of?</h2> <p>Unfortunately, while reducing monthly payments with an interest only loan may prove beneficial in the short-term, there are certain costs associated with longer term use that need to be taken into consideration. For example, if a borrower opts for a 30-year interest only loan, they may not be able to afford to pay the loan off in full. This means that at the end of the loan duration, the total amount of the loan would be due in one lump sum, which may be too large a sum to handle. In addition, interest only loans may be less convenient when rates are low and payments may increase if rates rise over time.</p> <h2>In Summary</h2> <p>An interest only mortgage payment calculator is a useful tool for those considering an interest only loan. It can show potential borrowers how much money they can save each month on their mortgage payments. However, borrowers still need to be aware of the costs associated with such a loan. It is important to use the calculator as a starting point in researching different loan options and to make an informed decision before committing to an interest only loan.</p>