Definition
Total Interest Payments
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Total interest payment refer to the sum of all interest paid over the entire life of the loan or to a specific date.
However, it is not a good reflection of the total costs incurred by a borrower as it does not take into account any settlement costs charged by lenders and third parties incurred upfront when the home loan was initially accepted.
It also does not factor in the time value of money.
Dividing the total interest paid with the total amount of money paid to date will help the borrower discover how much of payments go towards interest and principal on average.
The results could be surprising to many.
It is important to note that when people refer to interest payment instead of total interest payments, they are referring to the monthly interest in dollar amount rather than the accumulated total interest charges.
for the last 36 months?
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