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Fixed Rate Mortgage vs. Interest-Only Mortgage

Enter both loans

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After this the interest-only loan is repaid over the years left, at the same rate.

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years
More options
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Applied to the gains as if the investments were sold at the end. Use 0 for a tax-free account.

Cash flow and equity

Net worth lead

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Fixed payment

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Interest-only payment

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Interest-only loan payment after the IO period–
Increase when principal starts–
Home equity, fixed rate–
Home equity, interest-only–
Investments, fixed rate (after tax)–
Investments, interest-only (after tax)–
Equity + investments, fixed rate–
Equity + investments, interest-only–
Interest paid, fixed rate–
Interest paid, interest-only–
Return where both finish level–

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Both households spend the larger of the two payments each month and invest whatever their own loan does not need. Results are at the end of year –.

Year-by-year cash flow and equity

Payments made each year, home equity and invested savings for both loans.

YearFixed paymentsIO paymentsFixed equityIO equityFixed investmentsIO investmentsAhead

Results are estimates for educational purposes and are not financial, tax or legal advice.

Compare a standard fixed-rate mortgage with an interest-only loan when the money saved in the interest-only years is invested. See payments, home equity and total net worth for each, year by year. Pair this with the amortization calculator online for a fuller picture before you make a decision.