When you take out a 30-year mortgage, the sticker price of the home is only part of what you actually pay. Due to compound interest, you often pay hundreds of thousands of dollars just to borrow the money. This Total Interest Calculator reveals the hidden cost of your mortgage. By adjusting your down payment or loan term, you can see how to drastically reduce the amount of interest you pay over the life of your loan.
Loan Details
Total Interest Paid
$0
Monthly P&I Payment
$0
Total Amount Paid (P&I)
$0
Interest as % of Home Price
0%
Amortization by Year
| Year | Principal Paid | Interest Paid | Remaining Balance |
|---|
Frequently Asked Questions
Why is the total interest so high?
Mortgages are fully amortized loans spanning decades. In the early years, the majority of your monthly payment goes toward interest rather than paying down the principal. Because interest is continually charged on a massive remaining balance, it compounds to a staggering total over 30 years.
How can I reduce the total interest paid?
There are three main ways: 1) Make a larger down payment so you borrow less. 2) Choose a shorter loan term, like a 15-year mortgage, which severely limits the time interest can accrue. 3) Make extra payments toward your principal each month.
What does "Interest as % of Home Price" mean?
This shows the true cost of buying your home. If you buy a $400,000 house and your interest is $432,000, your interest percentage is 108%. This means you essentially paid for the house twice over by the time the loan is finished.