About Interest Only Mortgage Calculator
This interest only mortgage calculator lets you specify the length of the interest only period. It will show the amount of the interest only payment and the the total cost of a loan.
Do You Know the Pros and Cons of a Interest Only Mortgage?
Has any lender ever told you the Interest Only Mortgage was like a double-edged sword? It can help you achieve your dream of owning a home more easily, but it also can create a financial hardship for those who don’t fully understand what’s involved.
Interest Only Mortgage has become more popular to new homebuyers for the following reasons:
- Since the monthly payment is low, the savings can be used for personal spending, paying off higher interest debts, buying furniture for the new house, or even investing.
- The interest paid to the Interest Only Mortgage is still eligible for tax write-off at the end of the year.
- Some Interest Only Mortgages allow you to make a principal payment during the interest only period. This helps reduce your balance the following month which lowers your payment further.
However, Interest Only Mortgage is not for everyone:
- Beware a potential prepayment penalty for the first 1-3 years imposed by some lenders.
- You have to play the “catch up game” once you begin to pay the principal. The amount is much more since you didn’t pay during the interest only payment years.
- Think twice before committing to an Interest Only Mortgage if it’s the only way for you to afford a house.