How the Interest-Only Calculator Works

During the interest-only period, your payment is simply M = P × r - principal × the monthly rate - with none of it reducing your balance. Once the interest-only period ends, the payment recalculates using the full amortization formula (M = P × [ r(1+r)ⁿ ] / [ (1+r)ⁿ − 1 ]) over whatever term remains, using the still-unreduced balance - which is why borrowers often see a noticeable payment jump when the interest-only period expires.

This calculator shows both phases side by side so you can see that jump before you commit.

California rules & 2026 figures that apply

• Typical debt-to-income (DTI) guidelines by loan type: conventional loans generally allow up to 36% DTI on manual underwriting, up to 45% with strong compensating factors, and up to 50% through Fannie Mae's Desktop Underwriter (Fannie Mae Selling Guide, B3-6-02). FHA commonly benchmarks 31% housing / 43% total DTI, and USDA benchmarks 29% housing / 41% total DTI, both allowing higher ratios with automated underwriting or documented compensating factors (Lower, DTI Limits By Loan Type). VA loans weigh residual income more heavily than a strict DTI ceiling.
• Under the federal Homeowners Protection Act, your servicer must automatically cancel private mortgage insurance (PMI) once your loan balance is scheduled to reach 78% of the home's original value (as long as you're current), and you can request cancellation in writing once you reach 80% (NCUA, Homeowners Protection Act summary).

Estimates only, not a commitment to lend. Figures above reflect publicly reported 2026 program limits and CA tax rules as of this writing and can change - confirm current numbers and your specific eligibility with one of our loan officers before making a decision. The Home and Commercial Loan Company, Inc. is an Equal Housing Opportunity lender, NMLS #1665729.