Interest-only home loan calculator
Our interest-only calculator can help you work out how much you’ll pay each month on an interest-only home loan.
Key takeaways
- Our interest-only home loan calculator can help you work out potential loan repayments, depending on your interest rate, loan value and loan term.
- You can also use this calculator to compare how the repayment differences between an interest-only loan and a principal and interest loan.
- By choosing an interest-only loan your monthly repayments will be lower for the interest-only period, but
Your home loan details
Loan amount
$
Term
Repayment type
Interest rate
%
Interest only period
Payment frequency
Extra monthly repayments
$
Overview of your loan
Once the interest only period ends, your estimated repayments will be
(including extra )
Total loan repayments:
Total interest payable:
By making extra monthly repayments of
Your loan term could reduce by:
You could pay less interest, saving:
| Years remaining | Principal remaining |
|---|
Calculator Assumptions: The above calculations are worked out assuming you’re paying off a principal and interest or interest only home loan where the interest rate remains the same over the life of the loan. The repayment amounts do not take into account any additional fees or charges that may be charged to your loan (e.g. application fees or lenders' mortgage insurance premiums).
Disclaimer: Whilst every effort has been made to ensure the accuracy of this calculator, the results should be used as indication only. They are neither a quote nor a pre-qualification for a loan.
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How to use the interest-only home loan repayment calculator
An interest-only home loan repayment calculator can help you see how much your mortgage repayments would be.
You can change the interest rate, loan value, loan term and interest-only period to see the differences in how much your loan might cost you.
Here’s the information you need to input into the calculator to find out your monthly payments, total interest rates and total amount payable on the mortgage:
- Loan amount. This is the amount you intend to borrow.
- Loan term. How long you'll be taking out the home loan for (usually 30 years).
- Repayment type. Ensure you set this to "interest-only", but you can also toggle to compare what your loan would look like with principal and interest repayments.
- Interest rate. This is the rate of interest advertised by the lender. This will determine what you pay during the interest-only period. Make sure the rate you're looking at is definitely for an IO loan and not a P&I loan.
- Interest-only period. Set how long you'd like to pay interest-only for. Lenders off interest-only periods of 1 to 5 years.
- Repayment frequency. Changing whether you repay weekly, fortnightly or monthly will impact your repayments. Some lenders only allow for monthly interest-only repayments so be sure to check.
Why is it important to use an interest-only home loan calculator?
Before you take out a home loan you should understand what your home loan repayments would be, as well as your overall borrowing cost. This allows you to know how comfortable you'll be making those repayments. The calculator also helps you compare the cost differences between different loan terms and interest rates.
How much could my $700,000 interest-only home loan cost me?
The answer to this depends on a couple of factors: your interest rate and how long you choose your interest-only period to be.
Let's take a look at 2 scenarios:
Different interest rates
You can see here that the difference between a 0.5% interest rate means saving almost $300 a month during the interest-only period and over $32,000 over the loan.
| Loan value | $700,000 | $700,000 |
| Interest rate | 6.50% | 6% |
| Interest-only period | 5 years | 5 years |
| Interest-only monthly repayments | $3,792 | $3,500 |
| Total loan cost | $1,645,436 | $1,563,033 |
Different interest-only loan terms
You can see here that the shorter interest-only loan period means you pay less over the life of the loan. That's because you begin paying down the principal of the loan back earlier.
| Loan value | $700,000 | $700,000 |
| Interest rate | 6.50% | 6.50% |
| Interest-only period | 5 years | 2 years |
| Interest-only monthly repayments | $3,792 | $3,792 |
| Total loan cost | $1,645,436 | $1,612,782 |
Interest-only repayments have higher rates
The average variable interest rate with principal-and-interest repayments in August 2025 is: 6.56%
But the average variable interest rate with interest-only repayments is: 7.07%
This is a difference of 52 basis points.
Source:
Finder rate database
Frequently asked questions about the interest only mortgage calculator
Sources
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I am reading above, and am looking at the interest only variable loan for a couple of years before going to principle and interest, and was wondering.
what if the calculator amount above is different to what the bank required you to pay, how do you know what you minimum required payment will be, especially if the interest rate increase, do you get told of the new min repayment amount, or if you do not get told what the repayment amount is then do you just keep paying the amount you were last told.
Hi Raelene,
Thanks for the question.
The calculator above will only display an estimated loan repayment amount. You can see exactly what your repayments would be each month by requesting a key facts sheet from your lender before applying for a home loan. This will list all the details you need to know about your home loan.
Your home loan statement will also show you the interest rate you’re paying and the amount due.
I recommend getting in touch with a licensed mortgage broker. A broker can help you understand your financial position and they can leverage their panel of networks to find a lender that is more inclined to review your application.
I hope this helps,
Marc