Interest-Only vs Principal Calculator NZ

This calculator compares what you pay each month on an interest-only period against standard principal-and-interest repayments, then shows the sharp rise in your payment once interest-only ends. Interest-only looks appealing because the monthly payment is lower, but since none of the loan balance is repaid during that period, the full amount still has to be paid off over whatever years remain, pushing the payment up once the interest-only term finishes. You enter your loan amount, the interest rate, the total loan term in years, and how many of those years are interest-only. The calculator returns your interest-only payment, your principal-and-interest payment on the same loan, the extra interest you pay overall by choosing interest-only, and the monthly payment jump you face when the interest-only period ends and the loan reverts to principal and interest over the remaining term. Use it before agreeing to an interest-only period on an investment property or through a tight financial stretch, so the higher payment later does not come as a shock, and to weigh whether the short-term saving is worth the extra interest cost over the life of the loan. The figures assume a standard table loan with a fixed rate held for the full term and are an indicative estimate only, not financial advice, so confirm your exact numbers with your lender or a mortgage adviser.

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Interest-only keeps the balance unchanged, so after the interest-only period the full loan is repaid over the remaining years, which lifts the payment. Paying interest-only means more total interest. Estimate only, on a table loan, not financial advice.