Your monthly mortgage payment may also include a prorated property tax amount as well as a prorated homeowners insurance amount. If your mortgage payments are structured this way, you’re making PITI payments (principal, interest, taxes and insurance). Or you may be making only P&I (principal and interest) payments to your mortgage lender, being responsible for paying your taxes and insurance separately. Amortization schedules vary, depending on how each mortgagor makes payments; but if you want to know the amount of principal and interest payments that you’re paying each month for each $1,000 that you borrowed, as well as the total interest repayment, you can use a rate factor sheet.
Calculate the total amount of interest you pay over the life of your mortgage by using a table that lists "rate factors," which correspond with the interest rate and term of your mortgage.
Interest Rate Factor Sheet Layout
An interest rate factor sheet, also called an interest rate factor chart, is a multicolumn table that displays various interest rates and loan terms. For each row that represents a different interest rate percentage, there’s a corresponding rate factor in the column that represents different loan terms. First you’ll find the interest rate you’re paying, typically by following the rates vertically down the left-hand side of the rate factor sheet, and then you’ll follow the row horizontally until you find where your rate intersects with the cell in the column under your loan term.
Interest Rate Factor Formula
The beauty of using an interest rate factor sheet is that the interest rate factor formula is already calculated for you and built into the numbers that are listed on the sheet. By using this chart, you don’t have to make complicated math calculations to amortize your loan. The only math you’ll have to use involves a few simple calculations by using basic subtraction, multiplication and division.
Using Interest Rate Factor Sheet
Follow the interest rates down in the left-hand column on the rate factor chart until you find the interest rate for your mortgage. Follow this row to the right until you find the data cell underneath the term of your mortgage. For example, if your interest rate is 5 percent and the term of your loan is 15 years, the rate factor at the intersection of these two numbers is 7.91.
Calculating Monthly Mortgage Payments
Divide the total amount of your mortgage by 1,000 to determine your monthly payment for each $1,000 you borrowed. If the amount you borrowed for your mortgage was $185,000, divide that number by 1,000 for a total of $185. Multiply $185 by the rate factor of 7.91 to calculate your monthly mortgage payment of $1,463.35.
Multiply the number of years in your mortgage by 12 to find the total number of your monthly payments. For the example above, you have a 15-year mortgage with a total number of 180 payments (15 years x 12 months/year). Multiply this total number of payments (180) by the monthly payment you just calculated above ($1,463.35) to figure the total amount of all your payments is $263,403.
Calculating Total Interest
Finally, subtract the original amount you borrowed ($185,000, the principal amount) from the total amount of all your payments over 15 years ($263,403) to calculate the amount of interest you’ll pay over the life of your mortgage, which is $78,403.
Finding Interest Rate Factor Tables
You can find a rate factor sheet from various sources, including your local Multiple Listing Service agent, your real estate attorney or online. If you search online, you can also find rate factor sheets (or rate factor charts) as tables that are listed as “monthly payments per $1,000 of mortgage.”
- HSH Associates: Monthly Payments Per $1000 & Total Cost
- Diane Verducci: Interest Rate Factor Chart
- South Central Wisconsin Multiple Listing Service: Amortization Chart
- U.S. Department of Housing and Urban Development. "Federal Housing Administration." Accessed Mar. 9, 2020.
- Consumer Financial Protection Bureau (CFPB). "What Is Private Mortgage Insurance?" Accessed Mar. 9, 2020.
- Consumer Financial Protection Bureau (CFPB). "How Do Mortgage Lenders Calculate Monthly Payments?" Accessed Mar. 9, 2020.
- Consumer Financial Protection Bureau (CFPB). "How Does Paying Down a Mortgage Work?" Accessed Mar. 9, 2020.
- Consumer Financial Protection Bureau (CFPB). "Seven Factors That Determine Your Mortgage Interest Rate." Accessed Mar. 9, 2020.
- Rocket Mortgage. "Property Taxes: What They Are and How They’re Calculated." Accessed Mar. 9, 2020.
- Travelers. "What's the Difference Between Homeowners Insurance and Mortgage Insurance?" Accessed Mar. 9, 2020.
- Consumer Financial Protection Bureau (CFPB). "What Is a Prepayment Penalty?" Accessed Mar. 9, 2020.
- Internal Revenue Service (IRS). "Publication 936 (2019), Home Mortgage Interest Deduction." Accessed Mar. 9, 2020.
- Consumer Financial Protection Bureau (CFPB). "TILA-RESPA Integrated Disclosures." Accessed Mar. 9, 2020.
Victoria Lee Blackstone was formerly with Freddie Mac’s mortgage acquisition department, where she funded multi-million-dollar loan pools for primary lending institutions, worked on a mortgage fraud task force and wrote the convertible ARM section of the company’s policies and procedures manual. Currently, Blackstone is a professional writer with expertise in the fields of mortgage, finance, budgeting and tax. She is the author of more than 2,000 published works for newspapers, magazines, online publications and individual clients.