Interest Only Calculator?

[cazmayo]

I am hoping to switch to interest only on my mortgage, but would like to know how much of a reduction that would result in.


240,000 990 per month repayment term left 26 years (i think)

Is there a calculator online that I could use?

Thanks in advance.
Kind Regards
Caz

 

[NorfBank]

Monthly Interest only payment:

(Amount outstanding x Interest Rate) / 12

 

[moneyhoney]

Monthly Interest only payment:

(Amount outstanding x Interest Rate) / 12

Can it really be that simple??? Especially since most banks calculate interest daily & charge Quarterly??

 

[DerKaiser]

If you use APR, yes

 

[Soarer]

Yep, it's that simple.

Your principal isn't reducing, so whatever your interest rate is, that's what you pay.

 

[dubrov]

APR is an annual rate, not a monthly rate so the formula above won't give you the exact amount but it should be pretty close (slightly more).

The exact forumla is a little tricky as there are a different number of days in each month.

The following formula should bring you a so close it doesn't matter

((1+APR_RATE)^(1/12)-1)*OUTSTANDING_AMONT

where the ^ means "to the power of"