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Estimate the payment during the interest-only period and the jump when amortization begins.
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It means the borrower pays interest without reducing principal during the initial interest-only window, then begins amortizing the balance later.
Because the same principal balance must be repaid over a shorter remaining amortization window once principal payments begin.
It can make sense for borrowers with uneven cash flow, a short hold period, or a defined exit strategy, but only when the later payment still fits the plan.
The main risk is qualifying for or managing the higher payment once amortization begins if the property is not sold or refinanced first.
Updated 3/15/2026
Calculators Interest Only Guide is updated daily with practical mortgage guidance for this page.