How Much Interest Do You Really Pay on a Mortgage?

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JerichoHill
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How Much Interest Do You Really Pay on a Mortgage?

Postby JerichoHill » Tue Apr 17, 2007 6:17 am

Well, that depends. Here's an example straight from real life, what's to be my reality. This is a sheet that I went through, that you can find on the Budget Sheet we'll make available on GRS this week. This is for mortgages. I utilized BankRate.com to figure a good many of the cells out.

(Thankfully, these are fixed rates...2nd position is a Home Equity Loan, fixed rate)
NO PREPAY = Only Make Monthly Payments
PREPAY = Make Prepayments (about 600 a month)
PREPAY + ROLLOVER = When done with the 2nd Position, apply all of it towards the first
And the other one we rent the basement apartment out too, 900 a month.

NO PREPAY

Years Interest Mnth Pay Base
1st Position 188000 5.88% 26 179173 1177
2nd Position 170940 6.74% 15 101069 1512
358940 280242 2689
% Interest / Loan 78.07%


PREPAY
Years Interest Mnth Pay Base
1st Position 188000 5.88% 17 130360 1177
2nd Position 170940 6.74% 9 50576 1512
Total 358940 180936 2689
% Interest / Loan 50.41%

PREPAYMENT AND ROLLOVER
Years Interest Mnth Pay Base
1st Position 188000 5.88% 13 110743 1177
2nd Position 170940 6.74% 9 50576 1512
Total 358940 161319 2689
% Interest / Loan 44.94%

PREPAYMENT AND ROLLOVER AND RENT BASEMENT APARTMENT OUT
Years Interest Mnth Pay Base
1st Position 188000 5.88% 8.4 70975 1177
2nd Position 170940 6.74% 5.33 32721 1512
Total 358940 103696 2689
% Interest / Loan 28.89% 4689


So there's your answer. But not really. Those are in NOMINAL TERMS. Since Inflation is a debtor's friend, in terms of real dollars, its actually less
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plonkee
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Postby plonkee » Tue Apr 17, 2007 8:48 am

In a very un-lovely way for my upcoming (hopefully :roll: ) house purchase, if I don't prepay, I'll be paying 99% interest. As in, almost half of all the money that I pay will be in interest :shock: . Still, I'd have had to pay rent anyway?
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