The Crazy Amount of Interest Paid on a 30 Year Mortgage

[{"selector":"#anim-dfd89148-0542-4db7-a0e8-2f3091041932","keyframes":{"opacity":[0,1]},"delay":100,"duration":2000,"easing":"cubic-bezier(0.4, 0.4, 0.0, 1)","fill":"both"}] [{"selector":"#anim-090c2509-09cc-4308-9a45-d80b2cc78621","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-eba57f71-b159-4999-bfb7-1b9acaf93bb0","keyframes":{"transform":["translate3d(0px, 197.81282%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Learn more

If you’ve ever had a 30-year mortgage, you may remember the feeling of opening your first bill.

[{"selector":"#anim-adda600f-44b0-4408-b947-2a24fcc343cf","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-12e434dd-fd1e-4c2a-911b-ce7a5f223da2","keyframes":{"transform":["translate3d(0px, 99.53428%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-da96d274-e8a9-48aa-ada9-c3b16cc02b7c","keyframes":{"opacity":[0,1]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-ef643855-d8d9-496f-91b3-ab78c4e54987","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

We had a relatively low interest rate historically at 6% though that seems ridiculously high in this age of low interest rates.

[{"selector":"#anim-6e8bff8e-7fab-4ca0-abf4-8dfad9976eb4","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ccff5434-3cee-4d84-a099-ae4620a8fc87","keyframes":{"transform":["translate3d(0px, -99.64486%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d8adb593-40db-4655-b424-1f31aa8b25d0","keyframes":{"opacity":[0,1]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-5d821ea7-2d0e-4e67-af99-d8e07e8f50b6","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

How Much Interest Will You Pay During the First Years of a 30 Year Mortgage?

[{"selector":"#anim-cccfaa2b-a2ef-41f7-8bc3-282a8bb92e8f","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-55288417-df80-4c9e-94b8-7d50bd5fc7bc","keyframes":{"transform":["translate3d(0px, -99.64486%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-468ad6a2-d09e-4f4d-bc9c-dacc8ae97065","keyframes":{"opacity":[0,1]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-4bfd904c-db3f-4fb7-9b06-0311df2542b8","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] During your first year on a 30 year fixed mortgage, nearly 70% of your mortgage payment of $477 will go to interest alone. Learn more

Is a Mortgage Compound or Simple Interest?

[{"selector":"#anim-6103a4b8-35c6-458a-8b32-2e9d39efdf4e","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-bfe0771a-f1ef-4cac-b899-25e7c54efccc","keyframes":{"transform":["translate3d(0px, -99.64486%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3c2a6492-27fa-4a99-958d-225f2c618a31","keyframes":{"opacity":[0,1]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-c0b9bef2-aa47-471e-8cb6-fdab3a498dde","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] While it feels like interest is reverse compounding when nearly 70 percent of your payments are going toward interest in year one. Learn more

A mortgage is simple interest usually calculated monthly. For example, the table below shows that interest is based on a simple balance calculation.

[{"selector":"#anim-a6aa874a-7784-456e-a122-c72f98cb9dd4","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-7cee1215-12ce-4c59-9e74-20a9f4ffb691","keyframes":{"transform":["translate3d(0px, -99.64486%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-b8e93627-b1af-401d-809e-2f98c187ce24","keyframes":{"opacity":[0,1]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-6702b8c6-6008-41cf-b36e-36291fdf6d69","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Learn more

How Long Do People Keep Their Mortgage?

[{"selector":"#anim-ae25d8eb-8004-447d-a070-69fde83c4932","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-0127513c-6b08-43b0-ba62-f95811d34e25","keyframes":{"transform":["translate3d(0px, -99.64486%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-d78edb69-8a1e-469c-b579-e6346dfdb266","keyframes":{"opacity":[0,1]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-5c2413a3-2980-4602-b132-04176f9d74f7","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] Over the past several years, mortgage tenure has increased from about six years to 10 years. Learn more

The Case for a 15 Year Fixed Mortgage

[{"selector":"#anim-66ad0105-cdad-4fcc-bcd8-55af2d4262b1","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-09edb00b-67a9-46b0-9896-6c495ad89c11","keyframes":{"transform":["translate3d(0px, -99.64486%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-2c2976f3-5276-4096-8217-aeef5a569e14","keyframes":{"opacity":[0,1]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"both"}] [{"selector":"#anim-4217a762-80a1-4ce4-b52b-9631029f8e6e","keyframes":{"transform":["scale(0.3333333333333333)","scale(1)"]},"delay":0,"duration":1200,"easing":"cubic-bezier(.3,0,.55,1)","fill":"forwards"}] First, interest rates are usually nearly a whole percentage point lower on a 15 year fixed mortgage than a 30 year fixed mortgage (it’s been closer to .75% recently). Learn more

Swipe Up To Learn More

[{"selector":"#anim-75c7e1f4-6a9d-45e3-a809-b897a93b3e2d","keyframes":{"opacity":[0,1]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-06be1c5a-d4db-40a8-a418-5cf89a6f5695","keyframes":{"transform":["translate3d(0px, 246.14610%, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":1000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Swipe up

MORE STORIES

[{"selector":"#anim-d6a92e01-e543-496e-a832-b2a1f45c1836","keyframes":{"opacity":[0,1]},"delay":0,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-f7a666d9-b4b0-410a-84cb-d8c1805f9d47","keyframes":{"transform":["translate3d(259.40593%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-6259b9c2-14d6-477a-b915-417077043401","keyframes":{"opacity":[0,1]},"delay":300,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-65a95107-4745-4daa-b07f-e86cce5152a3","keyframes":{"transform":["translate3d(42.07921%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":300,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-09f4c9fb-3f3c-4fc3-81a6-e5d4b74f2bf8","keyframes":{"opacity":[0,1]},"delay":200,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-023a6dc7-4372-4162-8c32-b177aafbc9e5","keyframes":{"transform":["translate3d(151.25000%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":200,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-89f0cbb1-3e3c-4383-8cfe-ec5e7781ff7a","keyframes":{"opacity":[0,1]},"delay":500,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e5e1638b-1510-4e0d-acde-a8622ac54871","keyframes":{"transform":["translate3d(-44.55445%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":500,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3cc2990a-6d60-4ead-b2de-fc6f8e7c72d0","keyframes":{"opacity":[0,1]},"delay":300,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a6b963f5-d524-4aec-8b60-8927f74d8077","keyframes":{"transform":["translate3d(-260.89109%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":300,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a28fe1a4-8eef-469a-b865-dd8b7f3c501b","keyframes":{"opacity":[0,1]},"delay":400,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-12bea1d5-6fa1-46b9-818e-2ed9723ba659","keyframes":{"transform":["translate3d(-154.75%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":400,"duration":2000,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] 21 Effective Ways to Save Money for a House Should I Pay Off My Mortgage? 5 Reasons Why It Makes Sense