How mortgage interest math worksYears ago, when I was trying to figure out for myself why the total cost of a mortgage (without taxes or insurance) was so high, I sat down and ran a bunch of iterative calculations, something I'd learned in a numerical methods class back in the 80's. I started with the premise that a mortgage is similar to a bank deposit paying interest, except the roles are exchanged in the sense that the bank has deposited money with you and you are paying them interest. The trick with a mortgage is that when the term, usually 15 years or 30 years expires, the bank gets all of it's money back. That means you aren't just paying the bank interest but principal as well, spread out evenly over the term. And this doesn't require calculus, as compound interest has been around for thousands of years. I wrote the whole thing up without skipping any steps (I think) on my website as Calculating Mortgage Interest.I'm just curious whether this is something that people are interested in since I'm also an author and it might make an interesting little eBook for Kindle. The funniest thing about my finance writing is that when I updated the work recently, I found that the mortgage tables I had provided for 15 and 30 year loans only ran from 4% to 8%. I had to go back and add a table that went from 0% to 4%, given the recent rate environment! January 18 2013 - Northampton Township00YesReport a ProblemProblemSelect oneOffensive contentIrrelevant contentSpam (pure self-promotion)OtherDetailsYour emailPlease enter a valid email address.Submit CancelContent flaggedWe will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.We're sorry. This service is temporarily unavailable. Please come back later and try again.