Definition
Interest Payment
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The interest payment on a housing loan refers to the monthly amount of interest (in dollars) that a borrower is obligated to repay the lender.
If a borrower is on a fixed rate mortgage, the interest payment will remain the same each month throughout the entire fixed rate period of the loan.
If a borrower is on a floating rate home loan, the amount of interest payment required will depend on the fluctuations of the index rates which in turn affects the fully indexed rate.
When a full amortization schedule is reviewed, a borrower can also observe how each payment in each period adds up to the total interest payments throughout the life of the mortgage.
Something borrowers should not is that the interest payment will always be equal to the interest due so long as the latter is equal or lesser than the scheduled monthly payment.
In the odd event that interest due is greater than the scheduled payment, then the scheduled payment will be totally made up of interest payment, with the excess possibly being accrued.
When one finds himself being unable to meet his debt obligations on the home loan, reviewing it and exploring what is available in the market might help him discover great opportunities to refinance and make repayments more manageable.
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