Buyer Tool
Interest-Only vs. Fully Amortizing
A lower payment today versus building equity from day one — see the full picture over time.
$
%
Same rate used for both
years
years
Interest-only payment
$5,416.67
Years 1–10
Fully amortizing payment
$6,320.68
Entire term
Payment after year 10 (interest-only loan)$7,455.73
Payment increase when amortization begins+$2,039.06
Total interest — fully amortizing$1,275,445
Total interest — interest-only$1,439,376
Extra interest from interest-only period$163,931
Fully amortizingInterest-onlyLoan balance by year
Side-by-side over time
| Year | Amortizing balance | IO balance | Amortizing principal paid | IO principal paid | Amortizing interest (cum.) | IO interest (cum.) |
|---|---|---|---|---|---|---|
| 1 | $988,823 | $1,000,000 | $11,177 | $0 | $64,671 | $65,000 |
| 5 | $936,110 | $1,000,000 | $63,890 | $0 | $315,351 | $325,000 |
| 10 | $847,761 | $1,000,000 | $152,239 | $0 | $606,243 | $650,000 |
| 15 | $725,591 | $855,891 | $274,409 | $144,109 | $863,314 | $953,235 |
| 20 | $556,653 | $656,615 | $443,347 | $343,385 | $1,073,616 | $1,201,303 |
| 25 | $323,042 | $381,053 | $676,958 | $618,947 | $1,219,246 | $1,373,084 |
| 30 | $0 | $0 | $1,000,000 | $1,000,000 | $1,275,445 | $1,439,376 |
Educational estimate only. Results are not a Loan Estimate, rate lock, rate commitment, or guarantee of loan approval. Actual rates, payments, taxes, insurance, and program eligibility vary and are subject to underwriting. Contact Marc Chamberlain for a personalized quote.
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