how much to repay on 100% interest investment mortgage

[giolla]

I am curious to know how much cheaper a 100% interest investment mortage on repayments per month than a normal mortgage would be?

Say for example you had an investment mortgage for 200k at 3.3% rate over 25 yrs the repayments would be approx 980 euro per month.
At the same rate but paying on interest only how much less per month would you have to fork up. I assume there is some way of working this out.

Is it like so (please forgive me if I am being totally stupiD):
in example above at 200k over 25 yrs at 3.3% you would pay approx 94k in interest over the course of the 25 yrs.

So with an interest only loan would you be paying repayments on the 94k over 25 yrs instead? And what would that work out at?

 

[stuart]

200k at 3.3% rate over 25 yrs the repayments would be approx 980 euro per month.

The above is correct but interest only would be (easier to calculate)

200 @ 3.3% / 12 = €550 pm

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[ClubMan]

On an interest only mortgage of €200K at 3.3% you would pay €200,000 @ 3.3% = €6,600 p.a. or €550 p.m. For a similar 25 year annuity/repayment loan you can work out the figures using Karl Jeacle's mortgage calculator which arrives at the figure of €979.92.

Assuming rates stay at 3.3% for the full term (obviously won't happen but we can't predict fugure rates and just want comparative figures here) the total interest paid on the interest only mortgage will be €165,000 and you still have to clear the orginal €200,000 borrowed - i.e. €365,000 in total. For the annuity loan the total cost will be €93,977 interest plus €200,000 capital or €293,977 in total.

Don't forget that interest on an investment mortgage can be offset against rental income.

Post crossed with the previous one.

 

[giolla]

sorry that was easy really I should have thought it out.


Thank you !