# Take a look at my mortgage

4 Replies

My mortgage is \$642.04.

Principal is \$171.81.

Interest is \$295.76.

Escrow is \$174.47.

Interest rate is 3.5%

Does this interest cash amount each month seem crazy high? I thought I would be paying principal and interest around a similar amount. It's this just me being naive or is this a weird mortgage? Also, can someone explain how I can use my principal when trying to buy a property?

30 year fixed? The principal will over take the interest in about 12-15 years. I don't have my handy 10BII handy so I can't give you an exact timeline.

You shouldn't really be whining about it though. I currently owe around \$1.5M at 10-12% so you'll get no sympathy from me on your, what I think ought to be illegal, 3.5% loan.

Does it bother you at all that you're the typical borrower - sign docs, ask questions later?

Google amortization calculator and familiarize yourself with it.

As for the interest, you borrowed a little over \$101,000 at 3.5% interest. On 101k, in month 1, you'll pay interest of \$101,000 * 0.035 / 12 = \$295

Annual interest 3.5% = 0.035 and there are 12 months in a year.

interest payment is always higher at the beginning of the loan and decreases as time goes on as you pay down the principal. Check your loan docs and there will be a breakdown of payments through the years of the loan.

Your question about how to use the principal to purchase a home. Do you mean equity? You can use the equity in your current home when you refinance, but depending on how much you put down on your current home, it will probably be a while before you have any substantial equity to take out. Then there is the question of refinancing at a the possibility of a higher interest rate.

The interest you pay each month is:

Interest = (Rate / 12) * Unpaid balance.

So, I get \$101,403.43 for your unpaid balance.

On a 3.5% fixed rate 30 year mortgage, you will have to make 122 payments before the amount of interest is equal to the printipal.

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