The interest only mortgage calculator helps you figure out what a monthly payment might be on an interest only mortgage loan. An interest only mortgage is a loan payment in which for a set term the borrower pays only the interest on the principal balance, with the principal balance unchanged.
Interest Only Mortgage is a non-amortized mortgage. During the repayment period of an interest-only mortgage, one only pays on the interest that accumulates but not on the principal. Interest only mortgage are becoming increasingly popular as it allows a person to pay a lower monthly payment at the beginning of the loan in order to save money so that a higher monthly payment is more affordable later in the loan.
Calculate the Interest Only Mortgage Payment for the given loan amount 10000 at 5% interest rate.
Therefore the Interest Only Mortgage Payment for the loan is 417.
Convert the interest rate into decimal point by moving the decimal point over to the left two times on the interest
(Current loan amount * Interest rate) / 12 = 100000*0.05/12 = 416.66 = 417