|Total Closing Costs||$3,700.00|
|Total Monthly Payments||$483,139.46|
|Total Cost of Loan||$486,839.46|
|Monthly Payment per Thousand||$5.41|
|Annual Payment per Thousand||$64.91|
|Lifetime Payment per Thousand||$1,947.36|
When taking out a mortgage loan, you might be interested in knowing how much money you are actually paying for every thousand dollars you borrow. The amount you pay for every thousand dollars will change depending upon the total amount of your loan.
Let's say you borrow $250,000.00 on a 30 year loan at 5.000% interest. With this amount being borrowed, you would pay a total of $486,839.46 for the loan. This means you will pay $5.41 each month for every thousand dollars borrowed. Every year, you would pay $64.91 per thousand dollars financed. Throughout the life of the loan, this would mean you have spent $1,947.36 for every thousand dollars.
Calculate The Cost of Borrowing
When you buy a home, you already know that you're going to pay a lot of interest over the life of the loan. However, you may not be prepared for just how much you are going to have to pay. In many cases you could buy your house two or three times over with the amount you end up paying back to your loan.
A good mortgage calculator like the ones we offer at MortgageCalculator.org can help you determine your monthly payment and your total interest payments. However, looking at the total interest you pay may seem too abstract. For instance, if you pay 5 percent on a $250,000 30-year fixed loan, you will end up paying $233,139.46 in interest alone. Since this amount is spread out over 30 years, it may not have much meaning.
Understanding exactly how much you pay in interest each month and each year — rather than cumulatively over several decades — can help make the amount seem more concrete and immediate. Breaking it down further by every thousand dollars of your mortgage can help you how it all adds up.
For example, on that same $250,000 loan with 5 percent interest, you would pay $5.41 in interest each month for every $1,000 of the loan. You would pay $64.91 each year for every $1,000 of the loan.
Benefits of Breaking it all Down
Breaking down your interest payments in this way isn't just an exercise in math. Getting this kind of analysis helps you to better understand how just the cost of your home can significantly impact how much you pay over the life of your loan. Of course, getting the best interest rate possible will help you to save money. However, if you aren't able to lower your interest rate any further — either because you haven't been able to put together a larger down payment or because you haven't been able to improve your credit score — then focusing on finding the best price for the home of your dreams can help you save.
By understanding the impact that interest has on your payment every month, you can learn how every $1,000 on the purchase price makes a difference. When you're looking at prices in the tens or hundreds of thousands of dollars, it can be easy to dismiss a few thousand dollars as inconsequential. After all, what's a few more thousand when you're already borrowing so much? Breaking down your interest by every $1,000 spent for every month and year can help you understand just how consequential a few thousand dollars can be.
Use our easy calculator to get the information you need to put you in a stronger position to negotiate with the seller and to create the right budget for you while also buying the home of your dreams. Just plug in the amount of the loan, the interest rate, the length of the loan, and any loan points, origination fees and closing costs. We'll mail you an easy-to-understand analysis of your interest charges by month and year in plain English. You don't need to enter any personal information. Just put in your e-mail and get the results in moments!
Money Saving Tip
How much money could you save? Lock in low rates today