Home loan repayments

Interest Only Mortgage Calculator

See the repayment during an interest only period, the higher repayment once it ends, and the extra interest it costs.

Cost: Free
Your figures: Stay in your browser
Method: Set out below

Loan amount

Interest rate

% p.a.

Loan term

years

Interest only period

years

Part of the loan term, so it must be shorter than the term.

Repayment frequency

Ongoing loan fee

$a month

An account or package fee, if your loan has one. Leave at 0 if not.

Monthly repayment

$3,000.00

Interest only for the first 5 years, then $3,865.81 a month in principal and interest for the remaining 25 years.

Repayment after the interest only period: $3,865.81
Total interest: $739,743
Total interest if principal and interest from the start: $695,029
Extra interest from the interest only period: $44,713
Total repaid: $1,339,743

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Estimate only, based on the figures entered and the assumptions listed below. It is not a quote, an offer of credit or personal advice.

Loan balance over time

The balance does not fall during the interest only period, so it has to fall faster afterwards to clear by the end of the term.

Interest only first
Principal and interest throughout

Show the figures as a table

Loan balance at the end of each year, with an interest only period and with principal and interest throughout
Point	Interest only first	Principal and interest throughout
Start	$600,000	$600,000
End of year 1	$600,000	$592,632
End of year 2	$600,000	$584,809
End of year 3	$600,000	$576,504
End of year 4	$600,000	$567,687
End of year 5	$600,000	$558,326
End of year 6	$589,320	$548,388
End of year 7	$577,981	$537,836
End of year 8	$565,942	$526,634
End of year 9	$553,162	$514,741
End of year 10	$539,593	$502,114
End of year 11	$525,186	$488,709
End of year 12	$509,892	$474,477
End of year 13	$493,654	$459,367
End of year 14	$476,415	$443,325
End of year 15	$458,112	$426,293
End of year 16	$438,680	$408,211
End of year 17	$418,050	$389,014
End of year 18	$396,148	$368,633
End of year 19	$372,894	$346,994
End of year 20	$348,207	$324,022
End of year 21	$321,996	$299,632
End of year 22	$294,170	$273,738
End of year 23	$264,626	$246,246
End of year 24	$233,261	$217,060
End of year 25	$199,961	$186,073
End of year 26	$164,607	$153,174
End of year 27	$127,073	$118,247
End of year 28	$87,224	$81,165
End of year 29	$44,917	$41,797
End of year 30	$0	$0

Interest only first, or principal and interest throughout

The same loan amount, rate and term, repaid both ways.

Repayments, total interest and total repaid with an interest only period first and with principal and interest repayments throughout
Measure	Interest only first	Principal and interest throughout
Repayment for the first 5 years	$3,000.00	$3,597.30
Repayment for the remaining 25 years	$3,865.81	$3,597.30
Total interest	$739,743	$695,029
Total repaid	$1,339,743	$1,295,029

How this calculator works

During an interest only period the repayment covers the interest and nothing else, so the balance does not fall. When the period ends, the full balance has to be repaid over the years left in the term, which lifts the repayment.

The comparison shows the same loan repaid principal and interest from day one, so you can see the true cost of the lower repayments up front.

Assumptions

The interest rate stays the same for the whole term.
Interest is charged at the repayment frequency: the annual rate divided by 12, 26 or 52 each period. A year is taken as 52 weeks or 26 fortnights.
Repayments are made at the end of each period: interest only first, then principal and interest.
The interest only period is part of the loan term. Principal and interest repayments then clear the full balance over the remaining years.
The rate is the same during and after the interest only period. In practice interest only rates are often higher.
An ongoing fee is added to the totals as it is charged.

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