Search

Interest-Only Mortgage Calculator

Our calculator shows you what an interest-only mortgage's repayments will be (weekly, fortnightly and monthly) and reveals the total costs of an interest-only mortgage.
Updated 3 May 2026
​​​​
​Our Interest-Only Mortgage Calculator Makes The Numbers Clear
  • Our guide to interest-only mortgages explains the pros and cons of such an arrangement in detail. 
  • If you are considering an interest-only mortgage, think very carefully about whether it is right for you

How to use our Interest-Only Mortgage Calculator
  • Enter your loan amount, total loan term, and interest rate.
  • Then choose how long you want the interest-only period to be (most New Zealand banks allow up to 5 years for owner-occupiers, and up to 10 years for property investors).

The calculator will instantly show you three things most other calculators never reveal:
  1. The headline payment during your interest-only period: This is what you'll pay each month, fortnight, or week while you're only paying interest, with no principal reduction.
  2. The payment shock when interest-only ends: Your repayments don't go away when the interest-only period finishes - they jump significantly. The calculator shows you exactly how much higher your payments will be when you switch to Principal & Interest, expressed both as a dollar increase and as a percentage. As an example, for a $500,000 loan with a 5-year interest-only period at 6.5%, the jump is roughly 25%. For a 10-year interest-only period, it's closer to 38%.
  3. The true cost of choosing interest-only: Most importantly, the calculator compares your total interest cost against what you would have paid if you went straight to Principal & Interest from day one. The difference - the actual cost of choosing interest-only - is the figure most borrowers never see, and the figure that should drive any decision about whether interest-only is right for you.

Calculator assumptionsThis calculator uses the standard amortisation formula and assumes:
  • A constant interest rate for both the interest-only period and the Principal & Interest period that follows (in practice, New Zealand home loans are typically fixed for one to five years and then re-fixed at the prevailing rate, which may be different from your starting rate)
  • The same lender and loan structure throughout the full term, with the loan automatically converting from interest-only to Principal & Interest at the end of the interest-only period
  • No fees, lender charges, low equity premiums, or break costs are included
  • The "total interest if you skipped interest-only" comparison assumes you would have taken the same loan amount over the same total term as a straight Principal & Interest loan from day one

Important to know: These results are illustrative projections, not a loan offer or financial advice. Your bank applies interest-only approval, loan-to-value ratio limits, and serviceability tests on top of these calculations.

Your interest-only mortgage

Interest-only period
NZ banks typically allow up to 5 years interest-only for owner-occupiers, and up to 10 years for property investors.
Payment frequency
Your monthly payment during the interest-only period $0 For 5 years, then it changes
!
Your payment will jump $0 when the interest-only period ends After your interest-only period, you'll pay $0 per month for the remaining term

The true cost of going interest-only

Total interest with your interest-only period $0
Total interest if you skipped interest-only $0
Extra cost of choosing interest-only $0

Loan balance: with vs without interest-only

With your interest-only period Straight Principal & Interest from day 1
Important: Our calculations are based on the assumption that you make the same fixed mortgage repayment for the entire interest-only loan period, the interest rate does not increase or decrease, you don't miss any repayment deadlines, overpay or underpay.
Your Interest-Only Mortgage Calculator is Brought to You by LifeDirect Mortgages

LifeDirect Mortgages, a trusted name in mortgage brokering across New Zealand, proudly supports this guide. We value LifeDirect Mortgages' commitment to helping New Zealanders secure the best home loan solutions, offering personalised advice tailored to your needs.

Whether you're a first-home buyer, looking to refinance, or exploring investment property options, LifeDirect Mortgages' experienced team makes the process simple, transparent, and stress-free. We proudly name them winners of our 2026 Editor's Choice for our favourite nationwide mortgage adviser.

We encourage you to contact their friendly experts to discuss your mortgage needs - you can learn more about LifeDirect Mortgages with our detailed review or visit their website.

Ready to Apply for an Interest-Only Home Loan?

Consider a Mortgage Broker - They Usually Save Time and Money
​Mortgage brokers are popular and don't charge a fee. Their service goes beyond what a bank offers by comparing a number of lenders to find the best deal for your circumstances.

We've shortlisted top-rated mortgage brokers who go the distance for their clients in select cities around New Zealand:
​​Important: Are you ready for a mortgage?
Our friends at LifeDirect Mortgages have a useful Mortgage Potential Calculator that gives you a clear snapshot of your borrowing ability in just a few clicks. Whether you're looking for a first home, refinance, moving home or an investment property mortgage, simply enter a few details, and you'll see:
  • Your estimated borrowing amount
  • Monthly, fortnightly, and weekly repayments
  • Your deposit and income breakdown
  • Tips to improve your mortgage readiness

It's easy to use, with clear visuals to help you understand your position. You do not need to enter any personal information.
Related guides include: