This interest-only mortgage calculator helps you calculate the payments on loans that only charge the interest in Canada.
What is an interest-only mortgage?
An interest-only loan is a loan where your payment is only for interest and does not go towards paying down the principal on th loan. Some mortgages will have initial periods where the payments are interest only. This initial lower payments help to increase mortgage affordability which is quite helpful to first-time homebuyers.
How does this interest only mortgage calculator work?
This interest only calculator works by calculating the interest that you will pay over the term of your interest-only loan. This calculation takes the interest rate on the mortgage and multiplies it by the mortgage rate to provide you with your monthly interest payment. For total interest to be paid over the course of the term it multiplies this monthly amount by the total periods in your loan.
If you want to see how an interest only mortgage payment compares to one which also pays down principal, check out this mortgage payment calculator.