Tuesday, November 30th, 2010
Mortgages: when do you start paying more principal than interest?
standardrepayments
Re: a loan with a standard structure (ie NOT interest only or some other ‘exotic’ structure).
So the early repayments are mostly interest, and the proportion of interest declines and the proportion of principal increases over time, right? At what point does the proportion of principal start to match or exceed the proportion of interest?
Obviously there are some variables (interest rate, length of loan, etc) but I’m looking for a ballpark figure. One third of the way through the life of the loan? Half way? Two thirds?
When you’re half way through, that’s when the interest goes down and the principal goes up. You can call your mortgage co and request an amortization that will show you the break down
Topics: Third Mortgages |
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What your talking about is an amortization table. This will break down your mortgage by month and year. It will tell you how much of your monthly payment is applied to the principle and how much is applied to the interest. You can make an over payment and ask that it be applied to the principle which will decrease the amount of overall interest you pay. For example if your mortgage is $1000 per month and you pay $1100 over the couse of a year you’ve paid and additonal $1200 off of your principle. Usually more starts going to the principle about 2/3 of the way through assuming you don’t make any extra payments or over payments.
Go to the souced website below and you can put in your loan amount, loan term, and interest rate and it will calculate your monthly payment. Then it will give you a tab that says show amortization table and presto. All of your time table questions are answered.
Bankrate.com is an excellent source for all things financial.
Good Luck in all of your endeavors
References :
http://www.bankrate.com/calculators/mortgages/amortization-calculator.aspx
When you’re half way through, that’s when the interest goes down and the principal goes up. You can call your mortgage co and request an amortization that will show you the break down
References :
Retired bill collector 35 years
Roughly speaking, about 2/3rds the way through the life of the loan.
To see specifics, click on the link and enter the info of the specific loan you are looking at.
References :
http://www.amortization-calc.com/