You Can Bank On Our Rates

The most local, national and online bank rates!

Fixed Rate vs. Interest Only

A fixed rate mortgage has the same payment for the entire term of the loan. Use this calculator to compare a fixed rate mortgage to Interest Only Mortgage.

Fixed Rate Mortgage vs. Interest Only Mortgage

An interest mortgage could save you as much as SAVINGS_IO_MONTH per month.

**GRAPH**

A LOAN_AMOUNT fixed rate mortgage with a term of TERM years at INTEREST_RATE0 has a monthly payment of MONTHLY_PI0. An interest only mortgage at INTEREST_RATE2 has a MONTHLY_PI2 monthly payment. This could save you SAVINGS_IO_MONTH per month over a fully amortizing fixed rate mortgage.

Interest Only Mortgage
Initial savings on monthly payment SAVINGS_IO_MONTH
Payment savings first year SAVINGS_IO_FIRST_YEAR
Payment savings for five years SAVINGS_IO_FIVE_YEAR

Results Summary
  Fixed Rate Mortgage Interest Only Mortgage
Loan amount LOAN_AMOUNT LOAN_AMOUNT
Term TERM years TERM years
Interest rate INTEREST_RATE0 INTEREST_RATE2
Initial monthly payment MONTHLY_PI0 MONTHLY_PI2
First year totals:
  Interest
  Principal
  Payments
FIRST_YEAR_INTEREST0
FIRST_YEAR_PRINCIPAL0
FIRST_YEAR_TOTAL0
FIRST_YEAR_INTEREST2
FIRST_YEAR_PRINCIPAL2
FIRST_YEAR_TOTAL2
Five year totals:
  Interest
  Principal
  Payments

FIVE_YEAR_INTEREST0
FIVE_YEAR_PRINCIPAL0
FIVE_YEAR_TOTAL0
FIVE_YEAR_INTEREST2
FIVE_YEAR_PRINCIPAL2
FIVE_YEAR_TOTAL2
Total interest TOTAL_INTEREST0 TOTAL_INTEREST2
Total payments TOTAL_PAYMENTS0 TOTAL_PAYMENTS2
Ending balance ENDING_BALANCE0 ENDING_BALANCE2

Payment schedule

**REPEATING GROUP**






">

This Financial Calculator requires SUN's Java™ Plug-in. If you see this message you will need to download SUN's Java™ Plug-in. This can be done automatically by clicking the yellow bar at the top of your browser and choosing “Install ActiveX Control”.

You can also get SUN's Java™ Plug-in here: Get the Java™ Plug-in!

For more information about this Plug-in please visit: SUN's Java™ Plug-in
For more information these financial calculators please visit: Financial Calculators from KJE Computer Solutions, LLC

Definitions

Fixed Rate Mortgage
A fixed rate mortgage has the same interest rate and monthly payment throughout the term of the mortgage. The payment is calculated to payoff the mortgage balance at the end of the term. The most common terms are 15 years and 30 years.

Interest Only Mortgage
An Interest Only mortgage only requires monthly interest payments. Since you are not paying any principal, this can lower your monthly payment. However, since your mortgage's principal balance is not decreased, you will have a balloon payment at the end of the mortgage's term. Some Interest Only mortgages will also be adjustable rate mortgages (ARM). An Interest Only ARM will often have a period where the interest rate is fixed, and then it is adjusted annually. This calculator assumes that the interest rate for your Interest Only Mortgage remains fixed for the entire term.

Mortgage amount
Expected balance for your mortgage.

Term in years
The number of years over which you will repay this mortgage. The most common mortgage terms are 15 years and 30 years. Please note that for the Interest Only Mortgage you will have a balloon payment for the entire principal balance at the end of the loan term.

Interest rate
Annual interest rate for each mortgage type.

Prepayment
A monthly prepayment of principal you would like to apply to your Interest Only Mortgage balance.

Monthly payment
Monthly principal and interest payment (PI) for the Fixed Rate Mortgage. This is an interest only payment for an Interest Only ARM.



Savings Center
Sponsored by

green arrowFinancial Resources

CalculatorCalculators: Access to our Savings, Mortgage, Auto Loan and Personal Finance Tools.