Calculating Monthly Interest payment?

6 Replies

How can i figure out how much of my payments are going towards interest and principal?

I found an online calculator for finding my monthly payments, but how do I know how much each month is for interest?

For example, for simplicity sake if I had a loan for 100k at the interest rate of 5% over 30 years. My calculation says the monthly payment will be 536.82. How do I know how much of that is interest and principal? Is it just even each month? 

Over 30 years it would be total cost of $193,255.78. So the total amount of interest paid was $93,255.78. Are my assumptions correct on that on how the interest is paid?

However, I understand that earlier you are mostly paying interest. So how do I know for each month is interest and how much is principal?

To calculate interest rate on the payment: Loan Balance * (Interest Rate / 12)

To calculate Principal towards payment: Payment Amount - Interest Rate on the Payment calculated above.

A quick Excel spreadsheet will do all this for you.  Also, your interest you pay changes every month since your loan balance decreases every month. 

So, for your example given 100K loan, 5% interest, 30 year fixed.

Payment 1: 100K Loan balance * (5%/12):

Interest: 416.67

Principal: 120.15

Payment 2: New Loan Balance 99879.85 * (5%/12)

Interest: 416.17

Principal: 120.66

For example, for simplicity sake if I had a loan for 100k at the interest rate of 5% over 30 years. My calculation says the monthly payment will be 536.82. How do I know how much of that is interest and principal? Is it just even each month? 

@Andy Thoman- my question is even worst: How did you get 536.82?
Can you break it down please?
Thanks

@Andy Thoman @Lyndon Timbang

Just type it into an "amortization schedule" (google it), it will give you the monthly payment and principal / split.  Assume on a 30 year loan most of the payment is going toward interest.

LOVE Bankrate.com's calculators.

Use the amortization calculator HERE

@ Alexander, Tom and Cara- thanks.
It’s driving me crazy figuring it out.

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