To calculate the monthly interest on a mortgage, multiply the current loan balance by the yearly interest rate, and divide that number by 12. You can also use an online mortgage calculator to determine the interest on your mortgage loan.
Continue ReadingYou can subtract any non-principle monthly fees, such as taxes and insurance, from your monthly payment. Subtract the monthly interest from your new monthly payment to determine how much of your payment goes toward lowering the principle owed on your mortgage. Subtract the principle portion of your monthly payment from the full principle amount you owe on the entire mortgage, to determine the new loan balance.
It is also possible to use a mortgage calculator to find out how much you can shorten your loan term and how much money you can save by paying more toward your monthly principle. Paying more than the monthly requirement just one time can help you save money and shorten the term of the loan.
An effective strategy for reducing the principle and interest is to pay half of your regular mortgage payment bi-weekly. There's a chance you may have to pay a fee for setting up a bi-weekly payment plan. You can also make two extra mortgage payments a year, or pay a small extra amount toward the principle every month.
Learn more about Credit & Lending