How much of my monthly mortgage payment goes toward the interest?

Home mortgage:
Lets just make up numbers and say i take 200k mortgage and pay 1k per month (not considering taxes). How much of my 1k goes to the interest on my mortgage and how much of it lowers from the 200k?

By | 2013-08-24T11:23:11+00:00 August 24th, 2013|Mortgages Home Loans Interest Rate|5 Comments

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5 Comments

  1. bcnu August 24, 2013 at 2:43 PM - Reply

    A $200,000 loan (not a mortgage – mortgage is a security document given for the note you signed), with a 4.4 percent rate at 30 years is about $1,000 per month. This means you will pay a total of $160,500 in interest if you pay the minimum for all 360 months.

    For the start of your loan, your interest outweighs your principal by almost 3 to 1. The principal portion does not exceed the interest portion until you’re into year 14 of 30.

    If you find extra money in your account you can certainly make additional payments on your loan, ALL of which will go toward the principal. For instance, if you come up with an extra $30,000 in the first five or six years of your payments, your loan will be paid off many years sooner and you will save a pile of interest.

  2. Gopal August 24, 2013 at 2:06 PM - Reply

    How far along are you in your mortgage? If you just started, as others have said, the bulk of your payments are going towards interest; 80-90% probably.

    What you can do to save interest over the long-term is to pay your mortgage Bi-WEEKLY. By paying every 2 weeks, rather than once a month, you will end up making 26 smaller payments during the calendar year, rather than 12 large ones. This pay down adds up over time saving you thousands in interest over the course of your amortization.

    I have a few revenue properties and have this payment schedule in place and it works well for me. Ask your bank and find out about it, as well as any other accelerated or lump-sum payments you can make without incurring any penalties. At least this way you can minimize the burn of interest! Hope that helps!

  3. the kid August 24, 2013 at 1:12 PM - Reply

    That would depend on your interest rate.

  4. Zarg222 August 24, 2013 at 12:41 PM - Reply

    at the beginning of the loan – probably less than 20% goes towards principle – the rest is interest – the principle portion doesn;t equal the interest portion until about 70% of the way into the loan (like 20 yrs into a 30 yr mortgage) – unless you pay extra principle as you go along

  5. Lisa L August 24, 2013 at 12:16 PM - Reply

    Look at an amortization schedule. Depends on rate, term, loan amount & how far into the mortgage you are. First few years…most goes to interest.

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