Question:

# How to calculate my annual interest payment?

The annual interest payment is part of the annual principal and interest payment (PI). The way you calculate the annual mortgage interest payment depends very much on your type of home loan (Hybrid or Option ARM, FRM, buydown, SIM, GPM, balloon, interest-only, refinance mortgage, etc.); the term of the mortgage and the year you are into the loan; the way the lender calculates interest - simple or compound interest; as well as on any other special features of your mortgage loan.

## Mortgage Annual Interest Payment Calculated Online

There is a great variety of mortgage calculators on the web. You could use one that is suitable for the mortgage type you have. Most of them will show the annual principal and interest mortgage monthly payment (leaving out taxes and insurance) plus the amortization table of the home loan.

## Yearly Fixed Rate Home Loan Interest Payment Example

Assume that you borrowed \$200,000 at 6% on April 1st, 2004 for 30 years.

In general, at the beginning of the mortgage term everybody pays a lot more annual and monthly interest than principal.

This is how your monthly and yearly mortgage principal and interest payment will look like in year 2005 (2nd year) and year 2015 (12th year), according to a free mortgage calculator:

Month Principal: Interest: Balance:
Year 2005 Jan: \$ 208.24 \$ 990.86 \$ 197,963.59
Feb: \$ 209.28 \$ 989.82 \$ 197,754.31
Mar: \$ 210.33 \$ 988.77 \$ 197,543.98
... ... ... ...
Dec: \$ 219.99 \$ 979.12 \$ 195,603.05
For 2005: \$ 2,568.78 \$ 11,820.43 (annual interest) \$ 195,603.05
Year 2015 Jan: \$ 378.87 \$ 820.23 \$ 163,666.41
Feb: \$ 380.77 \$ 818.33 \$ 163,285.64
Mar: \$ 382.67 \$ 816.43 \$ 162,902.97
... ... ... ...
Dec: \$ 400.24 \$ 798.86 \$ 15,9371.65
For 2015: \$ 4,673.63 \$ 9,715.58 (annual interest) \$ 15,9371.65

Even if you are calculating annual interest payments on your own, verify your calculations with the mortgage amortization table you received from the lender.

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