Interest-Only Mortgage Payment on $600,000 at 8%
A $600,000 interest-only mortgage at 8% annual interest has a monthly interest-only payment of $4,000.
How to use this tool
- Enter your loan amount and interest rate.
- Enter the amortizing term you want to compare against.
- See your interest-only payment and the larger payment that would also pay down principal.
- Use the difference to judge how fast you could build equity.
Calculate the interest-only monthly payment on a $600,000 home loan at 8% before principal repayment begins.
Frequently asked questions
- How is an interest-only payment calculated?
- Multiply the loan balance by the monthly interest rate (APR ÷ 12). Because no principal is included, the payment is lower than a fully amortizing one but the balance does not shrink.
- What happens when the interest-only period ends?
- Payments reset to a fully amortizing amount that repays the entire principal over the remaining term. Because the term is now shorter, that payment is noticeably higher.
- Is an interest-only mortgage a good idea?
- It can suit borrowers with irregular or rising income or a short ownership horizon, but it builds no equity through payments and risks payment shock. Weigh it against a standard amortizing loan.