Step-by-Step: How to enter an interest-only mortgage

To enter an interest only mortgage:

1. Enter a name for the loan
2. Enter the balance due on the mortgage
3. Enter the interest rate
4. Tick the Interest Only check box - do not enter a term.

- Required yearly interest only payment will be calculated and displayed automatically as the Payment Amount. Notice that the line graph will adjust to show the flat lined trajectory of the interest only note.

If you adjust the payment amount or add a term to the Years field, the Interest Only check box will be deselected and the loan assumed to include principle.

Note: The actual loan payment is a linked expense on the Expenses > Basics screen. It is this payment amount that can be adjusted to show additional payment toward principle, including stepped up lump sum payments.

To enter the date when the interest only mortgage will be repaid, on the Debt screen if you click Advanced Settings there is a Payoff Event. Click this to open the Payoff Event drop-down menu. Select any event from the planning timeline to schedule the payoff of the balance due on the debt, or create a new event by clicking the green 'New event' button at the bottom right of the Time panel which is on the right side of the Debt screen.

Note: For the payoff to be scheduled properly, the event selected must fall sometime within the duration of the debt or if the debt is linked to a property, such as a home, during the ownership of the property.

When a debt payoff is scheduled, the regular debt payment expense, which is created automatically by the software and found on the Expenses > Basic screen, will be stepped up in the selected event year to match the balance due on the debt.

If sufficient funds are available to fulfill the debt in the selected event year, payments will end. If the funds available in the selected event year are insufficient to pay off the balance on the debt, a shortfall will occur, appearing in red on the Let's See Cash Flow Chart. The software will then resume regular payments on the mortgage going forward.