Home
Back
Savings Formula:
| From: | To: |
Mortgage savings calculation determines the total interest paid over the life of a mortgage loan. It represents the additional amount paid beyond the original principal amount borrowed.
The calculator uses a simple formula:
Where:
Explanation: This calculation shows the true cost of borrowing by revealing how much extra you pay in interest beyond the original loan amount.
Details: Knowing your total interest cost helps in making informed decisions about loan terms, extra payments, and refinancing options to minimize overall interest expenses.
Tips: Enter your total mortgage payments and the original principal amount. Ensure both values are in the same currency and represent the full loan term.
Q1: How can I reduce my mortgage interest costs?
A: Making extra payments, choosing a shorter loan term, or refinancing to a lower interest rate can significantly reduce total interest paid.
Q2: Does this calculation include all mortgage costs?
A: This calculation focuses on interest costs. Additional costs like insurance, taxes, and fees are not included in this simple calculation.
Q3: How does loan term affect total interest?
A: Longer loan terms typically result in higher total interest costs, even if monthly payments are lower, due to interest accumulating over more time.
Q4: Should I focus on interest rate or total interest cost?
A: While interest rate is important, the total interest cost over the life of the loan gives a complete picture of the loan's true expense.
Q5: How accurate is this calculation for adjustable-rate mortgages?
A: This calculation provides an estimate. For adjustable-rate mortgages, the actual interest cost may vary based on future rate changes.