Your mortgage is the largest debt that you will have at least one time in your lifetime. It is the money you own on your home. But when you borrow money, the borrowed money from the lending agency, is not loaned to you for free. The fee charged is called the mortgage interest and is calculated as an annual percentage rate, otherwise known as APR. A borrower has to pay a monthly amount that will include part of the principal borrowed (the loan), part of the interest, some taxes and insurance.

It is important for you to know the amount interest you will have to pay for your loan, especially if you are buying a new house or you are refinancing the one you currently own. The mortgage interest calculation can be done using complex manual calculations or by using a mortgage calculator.

To start, you must calculate the amount of money you need to buy the house. This you do by adding the cost of the house, add to that the stated closing costs, and then subtract any down payment you may have to put towards the purchase of the house. The next thing would be to get an online mortgage calculator. These are available at sites like Mortgage Calulator and from Bank Rate.

Next your information is filled into the mortgage calculator. You will need to know principal amount to be borrowed, the interest rate and also the mortgage period, which is usually between 15 and 30 years. Then the "calculate" button is hit.

Depending on the site you are using, the resulting information will be displayed differently. If you use Your Mortgage Calculator, you will get the total amount of the payments that will pay off the mortgage, the total amount of the interest that will be paid by the end of the mortgage, and also the monthly mortgage payment that has to be made during the life of the loan.