ALL in One Interest Only Loan Calculator

This is all in one Interest-Only Loan Calculator with extra payment, prepayment, chart, summary, amortization table and lot of additional features. Interest-Only Loan Calculator can be used as Interest Only Home Loan Calculator, Home Renovation Calculator, Car Mortgage Calculator, Two-Wheeler Loan Calculator and Interest-Only Personal Loan Calculator. Apart from these simple calculator, it can also be used as Interest Only Education Loan Calculator, Payday Loan Calculator, Credit Card Calculator, Business Mortgage Calculator, Agriculture Loan Calculator, Interest-Only Gold Mortgage Calculator and many more other loan calculator types.


Note: (1) There are differences in excel sheet and google spreadsheet. We have created separate version for different spreadsheets. (2) Click on “Enable Editing” option when you see “Protected View” default message in excel spreadsheet.

What is Interest-Only Loan?

Interest-Only loan means borrower pays just the interest for specified initial period. Usually interest only period is between 1 to 10 years. This means that loan balance for specified period will remain unchanged. IO is the short form for Interest Only. Interest only payment method is available in adjustable rate mortgage loan. Borrower can repay the principal amount as EMI payment or lump-sum after specified date.

Interest-Only Loan Formula

You can use below Interest-Only mortgage formula to calculate interest amount for each payment cycle.

Interest-Only Payment = P * R

Here P is Principle / Loan Amount and R is Rate of Interest on Loan.

Interest-Only Mortgage Example

Let us take an example of Interest-only loan to understand it better. Assume that you have taken a home loan of 300,000 at 6% interest rate for 20 years of term. You will need to pay 2,149 ideally as EMI every month. Consider that you want to lower your EMI payment by opting Interest-Only loan for 3 years. Let us now use the above formula to calculate Interest-Only payment every month based on above scenario.

Interest Only Loan Payment = 300,000 * (6% / 12)

Interest-Only Payment = 300,000 * 0.005 = 1,500

Your monthly payment is reducing by amount 649. This is really great. This means that you will be paying 1,500 monthly for initial 3 years as Interest-Only Mortgage Payment.

Why Choose an Interest Only Loan?

You can consider Interest Only Payment option due to following reasons.

  • Buy larger home with lesser monthly payment than conventional loan. This means that you are confident on paying larger amount after specified period with increase in salary in future.
  • You can desire to own more houses by saving on monthly payments.
  • Your intension is to invest EMI savings to earn highest return on investment.
  • Buying a property with an intension to sell it within short period of time.

Advantages of Interest Only Loan

Let us see pros and cons of interest only mortgage payment to understand it better. Initially let us know the advantages of interest only payment.

  • Extra savings can be invested to improve your individual net worth.
  • EMI payments for initial years are minimal.
  • Interest-only payments are fully qualified for income tax-deductible in most of the countries.

Disadvantages of Interest Only Loan

There are advantages and disadvantages of interest only loan. Let us understand some of the important cons of interest only payment.

  • Extra savings on EMI are turned into expenses.
  • Increasing mortgage prices increases total cost of your loan.
  • Home valuation does not grow quickly as expected.
  • Many fail to contribute additional principal payment after specified period.
  • Income / Salary does not grow as planned.

How to Use Interest Only Loan Calculator?

It is really simple to use it. You need to enter few basic loan details like: EMI you can afford, Annual Interest Rate, Loan Term, EMI Payment Method and Start Date of Loan. Rest of all the details like: Interest Only Loan Summary, Interest Only Mortgage Chart are automatically updated after entering basic loan details.

Play with tool by changing the EMI payment method, extra payments and view the result. Get the customized look by changing company name, tagline of your company and name of the calculator. You are not allowed to re-brand or sell without our written permission. Tools listed on our website can only be used for personal and internal purpose.

Who can Use Interest Only Mortgage Calculator?

Here we have provided Interest Only Loan Calculator with interactive, colourful amortization chart and table. You can use this all in one Interest Only Mortgage calculator as below calculators.

  • Interest-Only Home Loan Calculator
  • Auto Interest Only Mortgage Calculator
  • Interest Only Credit Card EMI Calculator
  • Home Renovation Interest Only Loan Calculator
  • Interest Only Personal Loan Calculator
  • Small Business Loan Interest Only Calculator
  • Gold Interest-Only Loan Calculator
  • Payday Interest Only Mortgage Calculator
  • Interest-Only Student Mortgage Calculator
  • Car Interest Only Loan Calculator
  • Interest Only Consumer Durable Product Loan Calculator
  • Two-Wheeler Interest Only Loan Calculator
  • Interest-Only Construction Loan Calculator
  • And Many More Types of Loans.

You can download Interest Only Mortgage Calculator excel sheet or google spreadsheet and play with it. Most importantly you can customize Interest Only Loan Calculator according to your requirement. This will really assist you to provide personalized result with interactive charts and data to your customers.

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