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How do you figure out Interest Rate?

How to figure out what interest rate I'm paying? (Other than calling company)?

  • I have a variable rate mortgage and my interest rate is not printed on my statement, other than the dollar value of the interest charged for the month. The lender's customer service is awful, and they do not have a website that allows anything other than payments--no account information available. Since my interest is primarily curiosity-based and not critical to any major impending financial decisions (i.e. I'm not planning on re-financing in the immediate future or anything), I'd just as soon not call them! My confusion is related more to knowing which formula to use. What is the most common formula used for mortgages? If I had the right formula, I could probably muddle through, but I'm not sure I'm using the right formula. These are the numbers I'd like to use, based on a single month's statement: Previous Balance: 245,108.67 Payment due date: last of the month in a 31-day month Amount Paid: 1422.23 on last of the month Charges or interest: 966.94 Principal: 455.29 Unpaid Balance: 244,653.38 I THINK that if I use the formula y = 12(x/z), where 12 is months, x is the interest paid in one month, and z is the unpaid balance at the beginning of the month, that I'll get the right number, which, in this case, is 0.04734, or 4.734%. That sounds about right (it's gone down since I got the mortgage, yay!), but I'm not sure if I'm missing something--such as mistakenly using a simple interest formula when I should be using a compound one. While the simple interest answer above should be good enough (assuming it is right), I have a burning desire to know *precisely* what my rate is... and how to figure it out for myself in the future. So I would greatly appreciate any responses which contain both the formula I should to use, as well as the correct answer, so I can confirm my calculations. Thanks! :)

  • Answer:

    Since it's not a fixed rate, you'll have to call the bank. You can ask how long that rate will be in effect.

Erika S at Yahoo! Answers Visit the source

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Try putting the amount of your mortgage into this mortgage calculator, and the number of years agreed, and try the interest rate of 4.734% that you estimated - and see if the monthly repayment matches up with the amount you pay. If it doesn't, then vary the percentage rate until you get a close answer, and you will have a pretty good idea of the interest rate of your loan. http://www.bankrate.com/calculators/mortgages/bi-weekly-mortgage-calculator.aspx

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