Definition: To compute an interest-only payment, multiply the original balance of the loan by the interest rate and divide by 12. Interest-Only payments are made up of interest and do not contain any principal. When the loan is due, the original balance is due.
At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.
Examples:
If you borrow $10,000 payable monthly interest only at 8% for five years, you will pay $66.67 per month and owe $10,000 at the end of 60 months.See about Interest Only Mortgages
