01
Initial phase
Note and payment schedule
Record principal, rate, payment frequency and the number of interest-only payments.
Loan terms · field guide
An interest-only payment is only one phase of the loan
Identify when principal repayment begins and compare the payment after the interest-only period ends.
Sources checked November 1, 2026 · Educational document review · No loan offer
Build the evidence before choosing an input
02
Repayment phase
Amortization schedule and reset provisions
Confirm the remaining amortization period and whether the rate stays fixed or changes.
03
Full monthly burden
Taxes, insurance and association costs
Interest-only P&I is not total PITIA. Compare the same property expenses across phases.
Fictional fixed-rate reset
An authored teaching record; amounts and situations are fictional, not market statistics or actual borrower files.
- Assume $240,000 principal at 6% annual interest, monthly payments, five years interest-only, then full amortization over 25 years. No fees, extra payments or balloon.
- Interest-only payment: $240,000 × 0.06 ÷ 12 = $1,200/month. Principal remains $240,000 after the interest-only phase.
- At the same 6% rate, 300 remaining monthly payments require about $1,546.32/month in P&I.
The modeled P&I rises by $346.32/month before taxes, insurance or HOA. This is a synthetic schedule, not an available loan.
Turn the record into a usable next step
- 1
Ask for the schedule through maturity, not only the first payment. Mark the first payment that includes principal and any separate rate-change date.
- 2
Check whether the quoted DSCR uses the initial payment, an amortizing payment or another provider-defined method. Do not assume it uses the smallest payment.
- 3
Run your own cash budget with the later payment and retain a contingency for expenses. Ask the provider to resolve any mismatch between the note, quote and schedule before signing.
What this evidence does not settle
The amortizing illustration uses P × r / (1 − (1+r)^−n), with r=0.06/12 and n=300. It assumes the rate never changes; it does not predict a future refinance or amend the site calculator.
Sources and scope
- CFPB — What is an interest-only loan?
Defines interest-only payments and the later repayment risk.
Read November 1, 2026. This is the check date, not a new effective date for the source.
- CFPB — Loan Estimate explainer
Definitions and document fields for checking costs, taxes, insurance and loan terms.
Read November 1, 2026. This is the check date, not a new effective date for the source.
The review steps are DSCRDealCheck’s editorial checklist. Agency guides and consumer mortgage explainers define documents and concepts; they do not establish a DSCR provider’s program rules or guarantee that consumer disclosure requirements apply to business-purpose financing. See the transaction-scope distinction in Regulation Z. Confirm the actual file with the provider and the relevant qualified professional.
Continue the loan terms review
Choose the unresolved document in your file. Each guide addresses a different input or obligation.