how to calculate fixed rate mortgage costs
the actual amount of interest that borrowers pay with fixed rate mortgages varies based on how long the loan is amortized that is the period for which the payments are spread out while the interest rate on the mortgage and the amounts of the monthly payments themselves don t change the way that your money is applied does mortgagors pay more toward interest in the initial stages of repayment later on their payments are going more into the loan principal so the mortgage term comes into play when calculating mortgage costs the basic rule of thumb the longer the term the more interest that you pay someone with a 15 year term for example will pay less in interest than someone with a 30 year fixed rate mortgage crunching the numbers can be a bit complicated to determine exactly what a particular fixed rate mortgage costs or to compare two different mortgages it s simplest to use a mortgage calculator you plug in a few details typically home price down payment loan terms and interest rate push the button and get your monthly payments some calculators break those down showing what goes to interest principal and even if you so designate property taxes they ll also show you an overall amortization schedule which illustrates how those amounts change over time the 30 year fixed rate mortgage is the product of choice for nearly 90 of today s homeowners 1if you re into crunching numbers there s a standard formula to calculate your monthly mortgage payment by hand 