See your interest-only repayment, the step-up when P&I begins, and the extra interest the interest-only period adds over the life of the loan.
What this calculator estimates
An interest-only loan lets you pay only the interest for a set period — commonly up to five years — so early repayments are lower and the balance does not reduce. The calculator above shows four things at once: your interest-only repayment, the larger principal-and-interest repayment that begins once the interest-only period ends, the size of that step-up, and the extra total interest the arrangement adds compared with paying principal and interest from day one. Enter your loan amount, the rate, the full term and the interest-only period to see all four.
What drives the number
The mechanics are unforgiving in a useful way. Because no principal is repaid during the interest-only window, the full balance still has to amortise over a shorter remaining term, so the repayment jumps when P&I starts — the step-up line shows exactly how much. Interest-only rates also tend to sit a little above P&I rates, and the longer the interest-only period, the more total interest you pay. None of that makes interest-only wrong; for an investor using an offset or managing tax, the structure can be deliberate. The question is whether it fits the plan, and which lender's interest-only policy supports it.
Use it as a starting point
Treat these figures as a guide to the trade-off, not a recommendation. The right answer depends on how the loan sits inside the rest of your position — owner-occupier versus investment, offset balances, and the lender you approach. Book a strategy session and we will model it against your real numbers.
General information only — not personal financial product or credit advice. The estimate is indicative and depends on each lender's policy, current rates and your full circumstances. AeFin is an Australian Credit Representative (CR 464548) of Finsure (ACL 384704).