Mortgage question-why so high?

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Monthly repayments made on your mortgage and the amount that was borrowed, is determined by current mortgage interest rates. Different-->companies offer different interest rates so it is a good idea to shop around for the best deal before settling on one particular lender.

Mortgage question-why so high?

Great question! Because a mortgage typically lasts between twenty and thirty years, you are paying interest on the full amount of the loan over the life of the loan.

To look at this in a slightly different light, consider if you were to deposit $200,000 into a CD today and you were earning 7%. At the end of 10 years you would have a total of $393,430 (interest compounded annually).

So, the bank (or your mortgage lender) is calculating how much money they're LOSING tying their money up with you for twenty or thirty years!

You may want to consider using a 'pre-calculator' such as this one: http://www.hsh.com/calc-howmuch.html to see how much you an afford to pay for a home.

Good luck!

Mortgage question-why so high?

There are mortgage calculator programs you can access on line. Mortgage payments are computed such that your mortgage including interest and principle will be paid off with little or no balloon payment over the amortization period.

In the first 5 years moat of the payment will be interest while in the last 5 years of the period it will be mostly principle.

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Mortgage question-why so high?

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