How to use
- Enter the balance the interest is charged on.
- Enter the annual percentage rate as a percent. 6 means 6 percent.
- Press Calculate. The hero number is one month of interest.
- The year line is that month times 12. It assumes the balance never changes.
How it's calculated
Monthly interest = principal × (APR ÷ 100) ÷ 12. Annual interest is twelve of those months.
Nothing is subtracted from the principal. If you pay more than this amount, the extra is principal, and this page does not track that extra. The extra-payment calculator on this site does, for a fully amortizing loan.
Worked example
A $200,000 balance at 6 percent APR: 200,000 × 0.06 ÷ 12 = $1,000 a month. A year of that is $12,000. After twelve months the balance is still $200,000 if you paid only the interest.
Assumptions
A fixed APR and a balance that does not change. No fees, no rate reset, and no day-count convention other than APR divided by 12.
FAQ
Does the balance go down?
Not on this page. Interest-only means the payment equals the interest, so principal is unchanged.
Is this the same as a mortgage payment?
No. A mortgage payment on the mortgage calculator includes principal that shrinks the balance. This page is only the interest line.
What if the rate changes next year?
Type the new rate. This form does not store a schedule of future rates.
Can the APR be zero?
Yes. Zero APR means zero interest. The balance is still the number you typed.