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Total Interest Formula:
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The Mortgage Total Interest Payment Calculator calculates the total interest paid over the entire mortgage tenure. It helps borrowers understand the true cost of their loan beyond just the principal amount.
The calculator uses the formula:
Where:
Explanation: The formula calculates the total amount paid over the loan term and subtracts the principal to determine the interest portion.
Details: Understanding total interest helps borrowers make informed decisions about loan terms, compare different mortgage offers, and plan their long-term finances more effectively.
Tips: Enter your monthly EMI payment, the total number of monthly payments (loan term in months), and the principal loan amount. All values must be positive numbers.
Q1: Why is the total interest often much higher than the principal?
A: Due to compound interest over long loan terms, the interest portion can significantly exceed the original principal, especially with longer mortgage durations.
Q2: How can I reduce my total interest payment?
A: Making additional principal payments, choosing a shorter loan term, or refinancing to a lower interest rate can reduce total interest costs.
Q3: Does this calculation account for changing interest rates?
A: No, this calculation assumes a fixed EMI throughout the loan term. For adjustable-rate mortgages, the calculation would be more complex.
Q4: Are there any fees included in this calculation?
A: No, this calculation only considers the principal and interest components of your EMI. Other fees like insurance or taxes are not included.
Q5: How accurate is this calculation for my actual mortgage?
A: This provides a close estimate for fixed-rate mortgages. For exact figures, consult your amortization schedule or lender statements.