# How to calculate an Interest Only mortgage payment?

Answer:If you are taking an Interest-Only mortgage, or a Pick-a-Pay with Interest-Only payment option you may need to know how to calculate an interest only mortgage payment.

Basically, you are advised to use a web calculator for interest only mortgage payments. And, your lender is supposed to provide you with a spreadsheet with your interest only mortgage payment and how it is going to change over the years, and after loan recalculation.

## Calculating Interest Only Payment

You need the loan amount, interest rate and term to calculate the interest only payment for a mortgage using interest only mortgage calculator. For example, if you borrow $200,000 at 7% for 30 years your interest only payment will be around $1208. The fully amortizing payment is $1364.

A pure interest only mortgage will usually allow interest only payments for 5 or 10 years and there may not be any negative amortization. However, with Option ARMs it is very possible that negative amortization will occur, the loan will be recast and a fully amortizing payment will be required.

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