Interest-Only Mortgage with Extra Payments

Interest-Only loans, as their definition implies, require considerably lower monthly payments than regular mortgage plans. Some minor extra payments towards the interest, however, can save you even more money.

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Amount :	($)
Interest Rate :	(%)
Length :	(Years)
Additional Payment :	($)
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Financial Analysis (Switch to Plain English)

	Interest-Only	With Additional Payment
Average Monthly Payment :	$1,041.67	$1,054.27
Months Paid :	360	360
Total Monthly Payments :	$375,000.00	$379,537.50
Total Interests Paid :	$375,000.00	$361,537.50
Interest Savings :	$13,462.50
Balance :	$250,000.00	$232,000.00
Equity Appreciation	$0.00	$18,000.00

Plain English Help (Switch to Financial Analysis)

Minor regular extra payments can make a major overall difference for your interest-only mortgage costs. If it is, say, a 30 year loan for $250,000.00 at 5.000%, the monthly payment will be about $1,041.67 and you will have paid $375,000.00 in interest by the end of the loan term. If you pay an extra $50.00 per month, however, your average monthly payment will not be much higher, only $1,054.27. At the end of the loan term, you will have paid $361,537.50 in interest. As your extra payment gets the interest paid off sooner, you will save $13,462.50 in interest by paying an extra $50.00 each month. This will reduce the balance of your $250,000.00 loan to $232,000.00.