– Why are my mortgage payments mostly interest?

Question

My monthly mortgage payment is GBP965. Of that, monthly interest varies from GBP714 to GBP770. The annual interest rate 5.64% and the remaining term is just under 27 years, five years fixed.

Clearly the interest is currently much more than 5.64%. What’s the calculation here?

In: Other

Answer 1

So what do you owe, about 150k+-ish?

(Outstanding balance) * ((interest rate) / 12) = 1 month of interest. Your interest per month goes down as your balance goes down.