With an interest only mortgage calculator, you can find out how much your monthly payment would be depending on factors you provide for the calculation. Typical factors include the total amount you need to borrow, known as the principal; the number of years you’ll be paying on the loan, or the term; and the interest rate for the loan. With an interest-only loan, any of these factors can change the estimated monthly payment. For example, changing the interest rate to a higher number will increase the monthly payment. Lowering the term or increasing the principal can also cause an increase.
An interest-only loan works well for individuals with uncertain income, such as a commission-based one. Using an interest-only calculator gives you a point to use for comparison to other loans. You can look at the estimated amortization schedule and determine whether or not you’ll save money in the long run with the interest-only mortgage. Based on the calculations, you may find you can afford to pay the principal and the interest, which may allow you pay the loan off sooner because a part of every payment lowers the outstanding balance. You can add in additional money each month to see how that affects the monthly payment and the loan payoff.
If you want to use a calculator for an interest-only loan for information, check out free ones on the Internet. After you find the information you need, you can email it to yourself or print a PDF of the calculations for your records. Some websites allow you to compare different mortgage options on the same screen, so you can easily compare and contrast your options. If you need more advice about whether or not to secure an interest-only loan, you can use the calculations as a starting point to discuss the matter with a financial advisor.