Interest rates on mortgages are provided in terms of a percentage and they include the amount of money that one has to pay to the lender together with the principal amount of the loan. Mortgages have made it easier for people to buy their homes, but at times they can be disadvantageous. One will be required to repay the loan on a monthly basis, which may not be easy to put up with. It is important for one to understand how the **house mortgage rates** are calculated for better preparation.

## How to calculate house mortgage rates

It is easy for one to learn how to calculate the *house mortgage rates*. One can make use of an online mortgage loan calculator. It is easy to come up with the amount of money that one will be required to pay on a monthly basis as well as the interest. However, in order to use this tool, there is a certain set of information that one will be expected to enter. They include details regarding the loan, the number of years for the loan to be repaid, the annual interest rate provided by the lender and the value of the principal amount.

Once all the above details have been provided, the “calculate” option should be clicked. Another added advantage of using the online mortgage calculator is that one will be able to compare different mortgage plans. On the other hand, if one is already paying his/her mortgage loan, then one can use the loan payments to calculate the house mortgage rates. It involves finding the difference between the payments and the principal amount that one is paying for each month. The difference is the amount that one is paying in terms of interest. The monthly principal amount is calculated by dividing the principal amount by the number of payments.

## Additional instructions on calculating interest

The above will be followed by subtracting the monthly principal paid from the monthly loan payment. The difference gives the amount of interest paid on each month. For instance, if the loan amounts to $180,000 and it is a 15-year loan. Then $180,000 should be divided by 180 (the number of payments, which is 12*the payment period, which is 15). If one is paying $1250 on a monthly basis, then the difference between $1250 and $1000 is the interest that one pays monthly, which in this case is $250.

One can also calculate the total interest that he/she pays for the whole period. It involves multiplying the monthly payment by the number of payments to determine the total amount paid over the loan life. The principal should be subtracted from the total payments to arrive at the total interest paid.

## Conclusion on interest rates

In conclusion, with the house mortgage rates provided by the lender, one will find it easy to determine the amount of interest that he/she is paying on monthly basis as well as the total interest to be paid over the life of the loan.

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