Irish Calculators
Loans & mortgages

Interest-Only Mortgage Payment Calculator

Model an interest-only phase followed by principal repayment over the remaining term, if any. If the whole term is interest-only, the original principal remains due at maturity.

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Your numbers

€
Use the principal owed before the next interest period.
%
Monthly interest is the annual nominal rate divided by 12. This is not a fee-inclusive APR.
Your figures stay on this device.

How the calculation works

Model borrowing with an initial interest-only phase followed by principal repayment. When the whole term is interest-only, the principal remains an explicit final balloon rather than being treated as already repaid.

Interest-only payment = principal × monthly rate. Any remaining months amortize the unchanged principal using the annuity formula.

  1. Calculate initial interest

    Multiply principal by the monthly rate. Each initial payment covers interest alone, leaving the principal unchanged throughout this phase.

  2. Determine the later obligation

    If months remain, amortise that unchanged principal over those months. Otherwise show the full principal as a final balloon due at term end.

  3. Review all cash payments

    Add initial payments, later repayments or balloon, and supplied fees. Review both payment phases instead of judging the arrangement from its lower starting amount alone.

Worked example: One interest-only month then repayment

Sample inputs demonstrate the method. They are not a forecast or product offer.

At 12% nominal annually, €1,000 incurs €10 monthly interest. The first example pays €10 in its first, interest-only month, then €1,010 in the remaining month. Interest totals €20 and total payments are €1,020.

Loan balance (€)
1000
Annual nominal interest rate (%)
12
Remaining term (months)
2
Interest-only months
1
Upfront fees
0

Expected result

Interest-only monthly payment
€10.00
Later monthly repayment
€1,010.00
Total interest
€20.00
Total paid including principal and fees
€1,020.00
Worked example: Entire term interest-only

Sample inputs demonstrate the method. They are not a forecast or product offer.

Loan balance (€)
1000
Annual nominal interest rate (%)
12
Remaining term (months)
3
Interest-only months
3
Upfront fees
5

Expected result

Interest-only monthly payment
€10.00
Principal due as final balloon
€1,000.00
Total paid including principal and fees
€1,035.00

Understanding your result

The later payment can rise substantially because the same principal must be repaid over fewer months. Lower initial debt service does not remove the obligation to repay the borrowed capital.

This is a constant-rate scenario. It does not establish product approval, availability or a suitable source of funds to meet a final balloon.

Questions you might have

Why is the later payment higher?

The same principal must be repaid over fewer months after the interest-only phase.

Choosing the right inputs

Interest-only months
Enter initial interest-only months within the complete term. These payments do not reduce principal in this model.
Remaining term (months)
Use the full term, including interest-only months. Entering only the later repayment period would cause the model to shorten it again.
Annual nominal interest rate
Use an annual nominal rate assumed constant throughout the scenario. Monthly interest is this rate divided by twelve.
Upfront fees
Enter known upfront fees separately. They increase total cash paid without automatically increasing borrowed principal.

Common mistakes to avoid

  • Do not assume interest-only payments reduce principal.
  • Do not omit the balloon when interest-only months equal the whole term, or compare that incomplete cost with a fully repaid loan.

Assumptions to check

  • Fixed nominal rate throughout; no extra principal payments or product eligibility assessment.

Sources and method

Read our calculation and testing approach.