1. What is the ANZ Interest Only Mortgage Calculator?

The ANZ Interest Only Mortgage Calculator helps you calculate the monthly interest-only payment for ANZ mortgages. This calculation is essential for understanding your monthly financial obligations during the interest-only period of your mortgage.

2. How Does the Calculator Work?

The calculator uses the interest-only EMI formula:

Where:

• \( P \) — Principal amount (NZD)
• \( R \) — Monthly interest rate (decimal)

Explanation: The formula calculates the monthly interest payment by multiplying the principal amount by the monthly interest rate.

3. Importance of Interest Only Calculation

Details: Understanding your interest-only payments helps you budget effectively during the interest-only period of your mortgage and plan for future principal repayments.

4. Using the Calculator

Tips: Enter the principal amount in NZD and the monthly interest rate as a decimal (e.g., 0.005 for 0.5%). Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is an interest-only mortgage?
A: An interest-only mortgage requires you to pay only the interest on the loan for a specified period, after which you start paying both principal and interest.

Q2: How do I convert annual interest rate to monthly?
A: Divide the annual interest rate by 12 to get the monthly rate. For example, 6% annual rate = 0.06/12 = 0.005 monthly rate.

Q3: What are the advantages of interest-only payments?
A: Lower initial payments, which can help with cash flow management, especially for investment properties or during periods of lower income.

Q4: What are the risks of interest-only mortgages?
A: You're not paying down the principal during the interest-only period, which means you'll have higher payments later and may face payment shock when the principal repayment period begins.

Q5: How long do interest-only periods typically last?
A: Interest-only periods typically range from 1-10 years, depending on the lender and loan terms.