Loans & Credit Scores : How to Calculate an Interest Only Mortgage

Thinking about an interest only mortgage.
Hi I am Carrie Kukuda of the Some Day Coach. I’m going to tell you how to calculate an
interest only mortgage. First you are going to need some information to gather up and
that information is as simple as your interest rates, your loan amount and what is the term
on your loan. You also have to figure that because it is an interest only loan whether
you are going to do a three year, a five year, a seven year or a ten year is your typical
ones you will find and what that means is for three years to five years to seven years
or ten years you are going to have only an interest only payment so you need to make
only the interest only payment and then the principal will pick up after those years are
done. How to calculate that just to give you a little example of how to calculate that
for yourself is say we have a loan of $100,000 and an interest rate of five. You are going
to take that $100,000 and you are going to times it by your interest rate so it would
be 100 times .05 which equals $5,000 and that is how much you’ll pay for that annual interest
only loan for the full year. The way to calculate for the month is to divide it by 12 months
which is a year. That will give you $416.67. It’s that simple. So just a little calculation
for you and again I’m Carrie and thank you.

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