To figure your mortgage interest from your payment you will need the breakdown of this payment. At minimum you’ll need the original loan amount and the breakdown of this payment between real loan repayment and escrow deposit. If your loan invoice also includes the amount credited to interest and provides a current loan balance, a present rate can be calculated using a handheld calculator.
With Monthly Interest and Present Loan Balance
Look up the sum credited toward curiosity and find the current loan balance from your latest mortgage statement. Many regular monthly statements provide a breakdown describing the way the payment is allocated.
Multiply the sum of interest for the month by 12. This gives the interest at an annualized rate. For instance, if the interest is 900, multiplying by 12 results in a yearly interest of $10,800.
Divide the interest by the existing mortgage balance. The outcome will be the rate of interest on the mortgage. Multiply the result by 100 to convert the rate to a percentage. Using the example from Step 2, using a mortgage balance of $170,000, gives a result of 0.0635. Multiply times 100 to obtain an rate of interest of 6.25 percent.
With Loan Payment Amount Plus Original Loan Amount
Determine what portion of your monthly payment is principal and what portion is escrow. The payment you send in includes the payment to the mortgage loan and a deposit for your escrow accounts. The amount of your check that belongs to escrow is not included in the calculation of your mortgage rate. The loan payment portion plus the initial loan amount may be utilized to compute an interest fee.
Open a new spreadsheet in Microsoft Excel or OpenOffice Calc. Spreadsheet software has mathematical functions to compute payments and rates. Format any cell for a percent using the pull-down Format menu.
Put in your loan information in any cell using the RATE function. The cell entry will look like this: =RATE(360;1000;-150000)*12. Replace 1000 with your monthly mortgage payment (minus escrow) and 150000 along with your initial loan amount. If you plug this exact function to a percentage-formatted cell you should get 7.02 percent.