What interest did you pay this month on your mortgage?

Here is an easy way to figure out how much money you paid on your mortgage this month. First thing you need to know is that mortgage interest is always paid in arrears, i.e., on January 1st, the mortgage payment that you make will contain the interest for the month of December.

So, the first step is to note the balance on your principal as of December, say it is $100,000.

Next, you need to find out your monthly rate of interest, and to do so divide the annual interest rate by 12. Say your interest rate is 3.6% (I am using a number that is easily divisible by 12, but rates are in that range right now!), then you would get 0.3%.

The interest is then the product of the balance and the interest rate, which in this case is $100,000*0.3/100 = $300.00

The remaining portion of your monthly mortgage payment pays down the principal, and also the escrows.