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Interest-only loans are not this schedule
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This guide
The mortgage schedule always applies principal. An interest-only period would leave the balance flat, and this tool will not draw that.
Every payment reduces the balance
The payment is the fully amortizing payment for the term. From the first month, principal is payment minus interest, and the balance falls.
An interest-only loan asks you to pay only the interest for a while. The balance stays put. If you type that loan’s interest-only payment into your head and compare it with this screen, this screen will look higher, because it is paying the loan off.
Do not force it
There is no switch for an interest-only window. Using a longer term to imitate a lower payment will still reduce the balance, just slowly, and the interest over the life of the loan will be the long-term interest, not an interest-only bill.
PMI dates assume that falling balance. An interest-only period would push those dates out. The dates here would be too optimistic for that product.
What to do with an interest-only quote
Read this calculator as the cost of a loan that actually amortizes on the same rate and amount. Decide the interest-only quote with the lender’s own schedule in front of you.
The debt list is a better home for a payment you choose yourself. A mortgage minimum that you invent is not what this mortgage form computes.
This explains how WiseCalculator treats the numbers you type. It is not a lender’s offer and it is not advice for your loan.
More in Home
- What extra years on a mortgage costLengthening the term lowers the payment and raises cumulative interest. The yearly table is where that cost shows up.
- The month you owe less than you borrowedYou owe less than you borrowed after the first principal payment. The early drop is small because interest takes most of the payment.
- Conventional PMI uses the original priceBoth the 80% request and the 78% automatic end are measured against the home price you typed, not a later value.