Question:

How much is the cost of interest on a home purchase?

Answer:

The cost of interest on a home purchase depends on the type of loan you are obtaining, the interest rate and the amortization plan.

For example, an FRM loan of $150,000 for 30 years at 6.75% will cost you $200,243 in interest over the years. The same loan with biweekly payments applied every two weeks to the loan balance for the whole 360 month period will have your cost of interest on the home purchase reduced with $47,776 and your loan term goes down with 73 months.

If you are getting an ARM, there are many variables and scenarios that make it difficult to standardize how much your home purchase interest cost will be.

In general, the interest cost of a home loan can increase or decrease with refinancing and applying accelerating payments (such as in bi-weekly plans) could greatly reduce your home interest cost (IC).

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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