Cumulative interest refers to the sum of all interest payments to date, at a particular point in time, or over the entire life of the loan.
This helps a borrower determine how much interest have been paid towards a mortgage to date.
It can also show how much interest charges would be paid at a particular point in future (e.g. 5 year later), and at the end of the loan when the final installment has be repaid.
Instead of accounting for interest by a percentage determined by the fully indexed rate, this shows the real actual number in dollars that go towards interest payments.
This can be a better variable to apply when budgeting.
Homeowners and buyers must take note that cumulative interest is not a good measure of the costs of credit.
for the last 36 months?
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