Mortgage interest calculation: calculate actual interest and installments


The calculation of mortgage interest is an operation that allows a borrower to buy a property to define his interest expense. As with any loan, the loan also provides for interest, which is an additional sum that the debtor must pay to the lender, often a bank or other financial institution. This sum is expressed in the form of an interest rate, a percentage of the sum paid which the debtor will have to pay. It is therefore evident that it is necessary to know the extent of these rates before making such an important decision as to the stipulation of a mortgage.

Fortunately, there are many calculation tools available to everyone online, which allow you to clarify the expenses you are facing in a few simple steps. These tools are varied (you can discover many with a simple search on a search engine), but usually they require the insertion of a few information that is easy to find.

Very often, the only information necessary for the computer to do its job is the duration of the loan

Very often, the only information necessary for the computer to do its job is the duration of the loan

The amount of the installments and the amount of the requested sum.

But other details are also important: for example, to distinguish, the annual nominal rate, and the annual effective global rate. When you want to calculate the interest, the result will be, which is the rate that is actually applied to determine the amount of the installments to be paid. The index that describes the total cost of the loan, and all ancillary costs to open the loan and complete the repayment of the loan.

Another important operation is the calculation of the deductible mortgage interest

mortgage interest

In fact, the current tax legislation provides for the deductibility of 19% of the interest payable on a loan aimed at buying or renovating a property. Some online calculators therefore also calculate the sum that can be deducted in the tax declaration: like many other similar instruments, these allow you to calculate the rates, but also the amount of the installment. In addition, by entering some simple information (amount of the loan, duration in years and date of the first installment), you can also find out the share of deductible interests.

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