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Interest Only Mortgage Calculator

One of the common misconceptions over the difference between a fully amortizing mortgage payment and one requiring only an interest only payment is in how the payments are calculated. To use our previous example, on a new $250,000 mortgage.

At 6% our principal and interest payment is $1498.88. Of that payment, early on you are reducing your principal by an average of $248.88 and you are paying an average of $1250.00 in interest monthly. Another way to calculate the payment without having to run an amortization table would to do a simple or interest only calculation. In our illustration, we take our loan amount, $250,000 and multiply by our interest rate, 6% which gives us an annual interest cost of $15,000. We then divide by 12 to find our monthly interest only cost which would be $1250. We get to the same place, just a different method to calculate our interest only mortgage payment.

Interest only mortgage options are now available with many loan types. Read more about these interest only mortgage options. Of all the interest only loans available, Interest Only Mortgage Option Arms offer the most flexibility. This is the product I use on my own home and investment property

I have just developed a short PowerPoint presentation in .pdf format on interest only loan products, some real world examples, and some suggestions on how best to use them available by email

Read more about Interest Only Mortgage Closing Costs

Read my new lock or float daily blog to see where rates are going

Brand New! I have purchased new financial modeling software that can do sophisticated analysis of your situation today as well as make suggestions on how small changes in how your mortgage is structured today can have a life changing effect in the years to come. Modules available include the Total Cost Analysis to compare the cost of up to 4 loans over the length of time you plan to be in the home; an Equity Repositioning Analysis to see how small changes in your debt structure today can have a huge impact in years to come; a Consolidation Analysis to see how consolidating debt can change your financial future; a PMI Analysis to see if eliminating PMI will be effective for you; and a Rate Watch Report which all my past clients are enrolled in to insure they remain in the mortgage that is best for them in their current situation. If any of these free analysis are of interest to you, please email me with as much specifics of your situation as possible

As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your debt is structured today can have a life changing effect in the years to come.  Read more about this free, no obligation service.

Interest Only MortgagePrequalify for your interest only mortgage.

 

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