Fidamen

Mortgage Interest-Only Calculator

This calculator models common interest-only mortgage scenarios: continuous interest-only payments, an initial interest-only period followed by full amortization, and interest-only with a balloon at maturity. Use it to compare periodic payment amounts and understand payment changes when amortization begins or a balloon becomes due.

Enter the loan amount, annual interest rate (APR), total term, interest-only period length, and number of payments per year. The tool assumes interest is calculated on the outstanding principal and periods are equal. It does not estimate taxes, insurance, fees, or escrow.

Updated Nov 13, 2025QA PASS — golden 25 / edge 120Run golden-edge-2026-01-23

Governance

Record eececa2da29b • Reviewed by Fidamen Standards Committee

Compute interest-only payments during the initial IO period, then calculate the amortizing payment for the remaining term.

Inputs

Results

Updates as you type

Interest-only payment (IO period)

$1,125.00

Payment after IO (amortizing)

$1,667.50

OutputValueUnit
Interest-only payment (IO period)$1,125.00—
Payment after IO (amortizing)$1,667.50—
Primary result$1,125.00

Visualization

Methodology

Rates and numeric calculations follow standard financial mathematics. Periodic rate = APR / 100 / payments per year. Interest-only payment = principal × periodic rate.

For amortizing payments we use the standard annuity formula: payment = principal × r / (1 - (1 + r)^-N) where r is the periodic rate and N is the remaining number of payments.

Validation and reliability guidance reference established standards for software quality and risk management. See NIST guidance for secure and reliable systems, ISO quality management principles, IEEE best practices for software engineering, and OSHA guidance for operational risk where workplace processes are relevant. This calculator includes conservative validation but is not a substitute for lender disclosures or official truth-in-lending calculations.

Worked examples

Example 1: $300,000 loan, 4.5% APR, 30-year term, 5-year IO, monthly payments. IO payment = $300,000 × (0.045/12). After 5 years the payment switches to the amortizing payment computed over 25 years of monthly payments.

Example 2: $200,000 loan, 3.8% APR, 15-year term, IO for entire term (pure IO). Payment remains interest-only each period; full principal remains due at maturity if the loan requires principal repayment at the end.

F.A.Q.

Is the interest-only payment the same as the amortizing payment?

No. Interest-only payments cover only interest and leave principal unchanged. Amortizing payments include principal and interest and reduce the principal balance over time.

What happens when the interest-only period ends?

When the interest-only period ends, the payment typically increases because the remaining principal must be amortized over fewer remaining payments. Use the 'Interest-only then amortize' method to see the post-IO payment amount.

Does this calculator include taxes, insurance, or fees?

No. This tool calculates interest and amortization only. Taxes, insurance, escrow, private mortgage insurance, late fees, and lender charges are not included and must be added separately when estimating total payment obligations.

How accurate are the results and what are the assumptions?

Results follow standard financial formulas but assume fixed rates, consistent payment intervals, and no prepayments or fees. Rounding differences and lender-specific conventions (daily interest accrual, grace periods, compounding differences) can produce different results. Always compare with official loan documents and lender disclosures.

Are there safety or compliance standards applied to this tool?

Design and validation reference NIST, ISO, and IEEE quality and software guidance for robustness; operational risk considerations reference OSHA where relevant. This is a calculation aid and not a regulatory disclosure; consult licensed professionals and official lender statements for compliance.

Sources & citations

Further resources

External guidance

Versioning & Change Control

Audit record (versions, QA runs, reviewer sign-off, and evidence).

Record ID: eececa2da29b

What changed (latest)

v1.0.0 • 2025-11-13 • MINOR

Initial publication and governance baseline.

Why: Published with reviewed formulas, unit definitions, and UX controls.

Public QA status

PASS — golden 25 + edge 120

Last run: 2026-01-23 • Run: golden-edge-2026-01-23

Engine

v1.0.0

Data

Baseline (no external datasets)

Content

v1.0.0

UI

v1.0.0

Governance

Last updated: Nov 13, 2025

Reviewed by: Fidamen Standards Committee (Review board)

Credentials: Internal QA

Risk level: low

Reviewer profile (entity)

Fidamen Standards Committee

Review board

Internal QA

Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person

Semantic versioning

  • MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
  • MINOR: New features or fields that do not change existing outputs for the same inputs.
  • PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.

Review protocol

  • Verify formulas and unit definitions against primary standards or datasets.
  • Run golden-case regression suite and edge-case suite.
  • Record reviewer sign-off with credentials and scope.
  • Document assumptions, limitations, and jurisdiction applicability.

Assumptions & limitations

  • Uses exact unit definitions from the Fidamen conversion library.
  • Internal calculations use double precision; display rounding follows the unit's configured decimal places.
  • Not a substitute for calibrated instruments in regulated contexts.
  • Jurisdiction-specific rules may require official guidance.

Change log

v1.0.0 • 2025-11-13 • MINOR

Initial publication and governance baseline.

Why: Published with reviewed formulas, unit definitions, and UX controls.

Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: e8488d10468d