Understanding mortgage loans
Understanding mortgage loans while you sharpen your basic mathematics skills is what I will show in this lesson
When buying a house most people take mortgage loans from a bank for the amount they finance, or still unpaid.
When a loan is given, it is repaid with interest in equal monthly installments over a period of time, usually from 15 to 30 years.
Ever wondered about some simple basic math involved in that type of loan?
Say for instance you buy a house for 250,000. Then, you make a down payment of 15% of the purchase price and take a 30year mortgage for the balance.
What is your down payment?
What is your mortgage?
Down payment = Purchase Price × Percent Down
Down payment = 250,000 × 0.15 = 37500
Amount of Mortgage = Purchase Price − Down Payment
Amount of Mortgage = 250,000 − 37500 = 212500
If your monthly payment is 1200 dollars, what is the total interest charged over the life of the loan?
Total Monthly Payment = Monthly payment × 12 Months per year × Number of years
Total Monthly Payment = 1200 × 12 × 30 = 432000
Total Interest Paid = Total Monthly Payment − Amount of Mortgage
Total Interest Paid = 432000 − 212500 = 219500
Use the quiz below to see how well you understand mortgage loans

May 21, 17 09:19 PM
Sharpen your math skills by grade here with crystal clear lessons
Read More
New math lessons
Your email is safe with us. We will only use it to inform you about new math lessons.