1. What is Home Loan Interest?

Home loan interest is the additional amount you pay to the lender beyond the principal amount borrowed. It represents the cost of borrowing money for your home purchase.

2. How Does the Calculator Work?

The calculator uses a simple formula:

Where:

• \( Total\ Paid \) — The sum of all payments made on the loan
• \( Principal \) — The original amount borrowed

Explanation: The difference between what you paid in total and what you originally borrowed represents the interest cost.

3. Importance of Interest Calculation

Details: Understanding your total interest helps you evaluate the true cost of your mortgage and compare different loan options. It also helps in financial planning and tax deductions.

4. Using the Calculator

Tips: Enter the total amount paid over the life of the loan and the original principal amount. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include all loan costs?
A: This calculates basic interest. For complete cost analysis, include fees, points, and other charges.

Q2: How can I reduce my total interest paid?
A: Make extra principal payments, choose shorter loan terms, or refinance at lower rates when possible.

Q3: Is mortgage interest tax deductible?
A: In many countries, mortgage interest is tax deductible up to certain limits. Consult a tax professional.

Q4: Why is my interest higher than expected?
A: Longer loan terms and higher interest rates significantly increase total interest. Even small rate differences add up over time.

Q5: How does amortization affect interest?
A: Early payments are mostly interest. As principal decreases, more of each payment goes toward principal.