Fixed Rate Mortgage vs. Interest Only Mortgage

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.

Javascript is required for this calculator. If you are using Internet Explorer, you may need to select to 'Allow Blocked Content' to view this calculator.

For more information about these financial calculators please visit: Financial Calculators from KJE Computer Solutions, Inc.

By changing any value in the following form fields, calculated values are immediately provided for displayed output values. Click the view report button to see all of your results.

Financial Calculators from
Dinkytown.net

Fixed Rate Mortgage vs. Interest Only Mortgage

*indicates required.

Fixed Rate Mortgage:

Press spacebar to hide inputs

Monthly payment $0.00

Mortgage amount:*This entry is required.Enter an amount between $0 and $250,000,000

Term in years:*This entry is required.

Interest rate:*This entry is required.Enter an amount between 1% and 25%

Report amortization:

Report amortization

Annually

Monthly

Interest only mortgage:

Press spacebar to hide inputs

Monthly payment $0.00

Initial interest rate:*This entry is required.Enter an amount between 1% and 25%

Prepayment:*This entry is required.Enter an amount between $0 and $50,000

**FIG_GRAPHTITLE** Column Graph: Please use the calculator's report to see detailed calculation results in tabular form.

Monthly Payment by Mortgage Type

press spacebar to hide graph

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.

EmpireAmerica
5525 Oakdale Ave Ste 150
Woodland Hills, CA 91364

Information and interactive calculators are made available to you only as self-help tools for your independent use and are not intended to provide investment or tax advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.