dcsimg
We research, you save.
Got Questions On Rates? (855) 610-2972

When will I begin paying more principal than interest?

By   |  Posted in Ask The Expert

Q: I have a 30-year fixed rate at 4 percent. When will my payment include more principal than interest?

A: In a fixed-rate mortgage, the amount of your monthly payment will not change, but the composition of the payment will over time. The tipping point for a fixed-rate mortgage--when the payment becomes more principal than interest--is a function of the interest rate and term. You might be surprised to find that the amount of the loan doesn't come into play at all!

In your case, a 4 percent 30-year fixed mortgage rate will see a payment comprised of equal parts principal and interest at about payment number 154. If your rate was 3.5 percent, that would move up to about payment number 120. If it was 5 percent, you would be waiting around until payment number 194, more than 16 and a half years after you began making payments.

ATE Graph

To see this for any loan, you can use HSH.com's Mortgage Calculator. Click on the green "See Details Year by Year" button, then scroll down to the year displayed where total annual principal and interest payments are pretty close (the calculators payment component chart can help you here, too), then open up the year to find the exact payment when balance is achieved.

If you prefer a print-and-take away version for your files, you can use our mortgage calculator which will give you a side-by-side breakout, including the payment number.

More help from HSH.com

  • Home buyer programs by state | 2017

    HSH.com has compiled a list of home buyer programs in each state in order to inform borrowers of what assistance might be available to them in their local area.
  • HSH.com on the latest move by the Federal Reserve

    The Federal Reserve concluded a meeting today with a quarter-point change in the federal funds rate, but no changes to other monetary policy tools.
  • 10 metros where a home costs about $1,000/month

    HSH.com identifies 10 metro areas where you can afford the principal, interest, taxes and insurance payments on a median-priced home for only around $1,000 per month.
  • Home price recovery index: Which metros have improved the most, least?

    Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peak it reached before the crisis?
  • The salary you must earn to buy a home in 27 metros

    Here’s how much salary you would need to earn in order to afford the median-priced home in your metro area.