When you borrow money, it does not come for free – you need to pay back a percentage of the loan amount.  This is called interest.  This is how the bank makes money.

An interest rate accumulates over time and it will add up to a large amount over the life time of the loan.   It is very important that when you are paying the loan you pay the minimum monthly mortgage payment set by the bank.

When taking out the loan check with the bank whether you can pay more than the minimum stipulated.  Make sure that if you pay more than the minimum interest the total interest is reduced – as you pay more, you pay the loan faster than the period set, and you should be able to reduce the overall cost of the interest on your loan.

Download out My ĠEMMA Loan Repayment Calculator to calculate the amount of interest you pay on your loan.  You can also use our My ĠEMMA Time to Repay Loan Calculator to estimate how fast you can pay off your loan if you had to pay a higher mortgage monthly payment than that set by the bank.

 

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