what is my current effective mortgage interest rate?

[trendlover]

current mortgage balance owed: $55,300
57 months [4 3/4 years] left on mortgage
total monthly payment $1075 [loan only]
$105 average goes to interest
$970 average goes to principal
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You say the interest rate is annual 5%. You have $55,300.00 balance.

For your first month interest calculate 12/.05 = .004
then calculate .004 x $55,300.00 = $230.41

$230.41 is first month interest

So now you calculate
$55,300 - $230.41 = $55,069.59

The new balance is $55,069.59

For your second month interest calculate
.004 x $$55,069.59 = $220.27

$220.27 is second month interest

So now you calculate
$55,069.59 - $220.27 = $54,849.32

The new balance is $54,849.32


So you repeat this calculation.

 

[trendlover]

Marco, for the calculation from my post above, I forget to deduct the principal you pay too. Sorry. So you can see the interest you pay I deduct from your balance, but you have to deduct the principal you pay from the balance too. Then repeat.

 

[marcoPolo21]

You're currently paying 2.28% on the remaining unpaid balance of the note. ($1260/$55300)

If you took out a new loan as described, the rate would be 4.325%... more of the early payments on the new loan would be interest and less paid on principal than your present situation.

this is the sort of number I was looking for, assuming it's even close;

if I'm paying more than 4%, from now to the end,
it sounds like an easy decision for me - pay it off

thanks
marc

 

[marcoPolo21]

this is the sort of number I was looking for, assuming it's even close;
if I'm paying more than 4%, from now to the end,
it sounds like an easy decision for me - pay it off
thanks
marc

whoops, I didn't even see the 2.28% - only the 4.xx %

not such an easy decision then

marc

 

[trendlover]

Marco, do you want to know if you keep the $55,300.00 cash to invest or trade, and not pay all the balance of your mortgage, then you can make more money from trade or invest your $55,300.00 cash compare to interest you pay for 4.75 years?

 

[Scataphagos]

this is the sort of number I was looking for, assuming it's even close;

if I'm paying more than 4%, from now to the end,
it sounds like an easy decision for me - pay it off

thanks
marc

If you have "cash in the bank earning nothing"... and you don't have a higher return alternative you wish to try, then paying off the loan would be better.

 

[nkhoi]

for maximum flexibility pay some extra into principle when you have nothing else to do with your cash.