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$17,027.64 – Total Amount We Paid In Interest Last Year

by J. Money on Monday, January 21, 2013

lol mortgage

And the amount we earned? A whoppping $165.36, haha… Guess who’s winning? :)

As much as I hate seeing those big numbers like that though, I find that posting it out here for the world to see motivates me even more to KEEP WORKING HARD at killing these debts. The “good” kinds people say – our mortgages. Though I’d like to just point out here that ALL debts sucks no matter how you look at it – even though yes, some are more tolerable and necessary than others. At the end of the day we still have to pay it all off though!

And when you see numbers like $17,000 evaporating before your eyes, it tends to make you pause for a moment and see if there’s anything you could be doing to stop it too. Like paying off more of it faster, or refinancing, or coming up with clever work-arounds, etc (which I’m still working on btw, once I have more answers I’ll produce a full report for ya!). It’s just so crazy when you really think about this stuff: We’re paying $17,000 for the courtesy of taking out a loan – which we still have to pay off in full too!! But nothing I didn’t sign up for of course…

In fact, here – let me run the numbers again and see what we’ll end up paying in total interest if we just kept our mortgages on track for the 30 years or whatever’s left…

Okay, if we never pay anything more extra towards our principal (which will never happen as long as I’m alive), we’d be paying a total of $575,334.01. $281,470.14 in principal, and $293,863.87 in interest!! How insane is that? Way more in interest than principal!! Another reason home ownership is definitely not for everyone, ugh… Though the alternative is paying tons of money renting without ANYTHING in return, so I guess it is the lesser of evils, eh?

On the plus side, it looks like we were paying $24,000 a year at one point (2010) – so at least we’re saving a bunch more now, that’s pretty cool! What’s that, 30%? Not bad for honkering down a bit! And also refinancing while we could… MAN I wanna be able to do that again – it’s so helpful!! And the rates are so low right now!!

Anyways, that’s what’s going down in my hood today. A brutal wake up call to never borrow so much money again in the future. I wanna be one of those people who buys their next home in pure cash :) Like everyone thinks is crazy and impossible. You can totally do it though if you prioritize and have a good 10-20 years head start! Haha… it’s all better than paying $293,863.87 in interest, that’s for sure… Something to think about at least.

How much did you guys pay last year? I think everyone should be getting their mortgage statements in the mail right about now…

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[LOL Photo by Dan4th]


{ 72 comments… read them below or add one }

1 Mrs. Pop @ Planting Our Pennies January 21, 2013 at 6:44 am

We paid around $8K in interest on our 3 different loans. =(

Not fabulous, but on the bright side the assets that we bought with the loans increased in value by more than that, so that softens the blow.

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2 J. Money January 21, 2013 at 4:50 pm

Excellent! Much better than some of us who lost value in their assets too! Haha…

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3 Lance @ Money Life and More January 21, 2013 at 7:13 am

I actually like mortgage interest due to the low rates today. If (when) inflation picks back up the future dollars you pay toward your loan will be worth much less than the dollars you are using to pay today AND your mortgage payment will stay the same. Of course, you’d have to live in the same house or at least keep it and rent it out for the full length of the mortgage to see that benefit.

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4 J. Money January 21, 2013 at 4:57 pm

That’s an interesting way of thinking of it actually, I kinda like it. At least with LOW rates and not those that are higher like I have, ugh.

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5 Glen @ Monster Piggy Bank January 21, 2013 at 7:24 am

I got sick of seeing how much interest I was paying each year for our mortgage so I decided to blog about it! I keep track of my mortgage payments each month here (http://www.monsterpiggybank.com/paying-off-debt) and we are really starting to get stuck into paying off our debt.

When we started we were paying around $17,000-$18,000 in interest every year. Now we are down to about $9,500 and I couldn’t be happier with our progress.

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6 J. Money January 21, 2013 at 4:59 pm

Nice work! Loving those graphs you’ve got there – they’d motivate me too! :)

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7 Walnut January 21, 2013 at 8:11 am

I clocked in at $3,648 in mortgage interest. This is about half of what it was two years ago before I refi’ed into my 15 year mortgage. I’m on target to pay this sucker off by my 30th birthday in about four years, which will bring more comfort (and cash flow!!!) than I’ll even know what to do with.

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8 J. Money January 21, 2013 at 5:00 pm

Am I allowed to say that I hate you? ;)

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9 Katie lake January 21, 2013 at 9:17 am

We paid about $5k interest on our mortgage and $850 on my student loans. Waiting for the other student loan tax document to come in for that final count.

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10 Punky Coletta January 21, 2013 at 9:28 am

I know, it can be so depressing to look at this stuff. I recently looked at ours, and figured out that only seven months worth of payments in the last 5 and a half years have actually gone towards our principle. De-press-ing. (A refinance was involved in there somewhere, though.)

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11 Leah January 21, 2013 at 9:29 am

My hubby and I are in the process of buying a home. We got our mortgage papers back to sign and saw that we’ll pay something like $100,000 extra in interest over the life of the 30-year loan. We hope to pay at a 15-year loan rate and have the room to drop back down in the event of a job loss, health problem, etc. All in all though, we do genuinely believe that the neigborhood we’re buying in will grow in value, that we’ll be able to rent this home out in the future, and that we’ll see this money again someday! Only time will tell if we’re right!

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12 J. Money January 21, 2013 at 5:01 pm

It’s VERY smart to have that Plan B too, just cuz you never really know how long you’ll stay in a place/etc. I kinda just skipped over that whole part when we bought ours on a whim, haha…. I’m a dummy.

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13 Philip January 21, 2013 at 9:37 am

Mine came in this weekend, it was just under $7,000 and I thought that was bad, guess it is all relative. Hopefully next year is much better since I refinanced in November.

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14 Samantha January 21, 2013 at 9:45 am

I am actually super proud and psyched of my mortgage interest for 2012. We only paid $2,386. When we started out it was around $10k. We are aggressively paying this bad boy off at only a 2.55% interest rate. We should have it paid off next year if we continue on this crazy journey. Remember me? http://www.budgetsaresexy.com/2012/08/inside-look-samanthas-money-is-she-crazy/

Next month we’re throwing a Halfway-House party… cause we’ll be halfway through the mortgage. :)

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15 J. Money January 21, 2013 at 5:03 pm

YES!!!! I REMEMBER YOU! How exciting! Can I go to that party too? :) $10k down to $2k is insane-balls, I’m impressed.

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16 SavvyFinancialLatina January 21, 2013 at 10:04 am

That’s a crazy amount of interest. I think most people don’t consider the full purchase price of their home. I mean come on, most people only see the initial purchase price, at least that’s how all home shows make it seem. I think if they consider the fact that they will probably end up paying 3x the purchase price by the end of their loan, they would buy a smaller house.
I don’t pay any interest on my home right now but in a year we will….

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17 J. Money January 21, 2013 at 5:04 pm

oh yeah – NO ONE really talks about it either, except when you go to sign on the dotted line (a billion times) and they mention it casually, haha… cuz the whole time you’re just thinking there’s nothing you can do about it anyways, so you suck it up and pretend you never saw it! ;)

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18 Grayson @ Debt RoundUp January 21, 2013 at 10:35 am

I hit close to $9k in mortgage interest in 2012. I don’t like that much interest at all. I am hoping to figure out a way to get out of the house and downsize a little bit, or at least get a cheaper mortgage. We will see what 2013 brings.

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19 Jen @ Master the Art of Saving January 21, 2013 at 10:45 am

We just bought our first house a few months ago, so I only made 3 payments in 2012. We aren’t trying to pay down our mortgage early right now, because we need the money to go to more important things, but we are rounding up to even things out.

Of our 3 payments we made, $1,623.81 was interest, $788.10 went to principle and $588.09 went to escrow. Each month we pay a little less interest and a little more gets applied to the principle.

The great things is that we’re only paying a little more than when we lived in a tiny *ss 2 bedroom apartment. It’s worth the interest to me. :-)

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20 Anne @ Unique Gifter January 21, 2013 at 11:02 am

Saving $3000 a year in interest is pretty sweet… onwards!
We will pay around $600 this year :-D This is the magical year where we pay off the bank, though.

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21 The Happy Homeowner January 21, 2013 at 5:00 pm

Congrats on the payoff–so exciting!

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22 J. Money January 21, 2013 at 5:05 pm

Yeah, I second that!

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23 Sarah Park January 21, 2013 at 11:05 am

I guess paying these interest isn’t bad at all if you are investing in a good one. In time, you will still benefit from your investments.

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24 Jacob @ iheartbudgets January 21, 2013 at 11:23 am

UGH! I don’t even want to know. Probably somewhere in the neighborhood of $14k. But, like you said, it’s the price of getting in the game, and at least you own a (hopefully) appreciating asset. I don’t think buying in cash is crazy, I think it’s awesome, more power to you! My wife and I were just talking 5 year plan, and we might outgrow our home by then! Scary to think about, but exciting too. Hoping to get my income up and build some equity before buying again. Won’t be able to buy cash (unless I strike it rich), but a 50% down payment sound about right :)

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25 J. Money January 21, 2013 at 5:06 pm

oh man, 50% down would make you a PIMP! And I bet you could get a better deal on the home too, or at least nudge yourself in there to beat out other buyers… Congrats on your future family expansion :)

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26 Jacob @ iheartbudgets January 21, 2013 at 11:24 am

MAN! I just looked it up, about $16k in interest!

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27 Jenn January 21, 2013 at 11:36 am

Ours came in this weekend at a whopping $26. My student loan interest was about $1200.

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28 Financial Black Sheep January 21, 2013 at 11:49 am

Holy crap that is a lot of money J! I don’t pay anything on my mortgage, ever since I paid it off in 2009. Which technically wasn’t a mortgage until my bank sold out to another bank and they had to classify it as something–long story. Your interest is what my house is currently worth without appraisal lol. No wonder I don’t want to buy anything else and can never decide on doing anything, except staying in my current home. OUCH! I would much rather spend that money on other things like school, eventually more traveling and hopefully soon investing. Do you live in a nice area? I guess I am just wondering why anyone would pay that much.

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29 J. Money January 21, 2013 at 5:08 pm

And that’s just my INTEREST! You don’t want to know the principal/escrow/etc etc haha… Our area (DC) is super expensive, unless you’re comfortable in less than desireable areas where I’m not. But no, our house and area isn’t super nice or anything, just a con of living here… which we plan on moving soon, and that’s one of the reasons why.

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30 Kurt @ Money Counselor January 21, 2013 at 12:13 pm

You make a great point J. We spend a lot of time working for the money lenders. It’s a great idea to quantify annually the total amount of interest one paid the prior year–it that doesn’t motivate debt payoff, I don’t know what would! We could all retire many years earlier if we’d save the interest expense we sign up for over a lifetime…

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31 Leigh January 21, 2013 at 12:48 pm

Wow, interest rates make a huge difference! My mortgage balance started out about $30k less than what yours was in your last net worth update and was down to just under $260,000 as of the end of 2012 and I paid about a third of what you guys did in mortgage interest in 2012 and I should pay even less in 2013. My interest rate was 3% on a mortgage I held for about half of 2012 and it’s 2.5% for the next five years.

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32 J. Money January 21, 2013 at 5:09 pm

YUP! My interest is almost double that so it screws us over… Way to go on locking in low! :)

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33 Kacie January 21, 2013 at 12:52 pm

I only have one statement so far (pre refinance) and that was around $4100. It’s looking like total, we’ll be around $5500 for the year, give or take.

I am so thankful we were able to refinance to a 15-year at 2.87%. Going forward, we’ll “only” have around $30k in interest for the life of the loan, but it gets even sweeter since we have a Mortgage Credit Certificate (that will erase $6k) and then the mortgage deduction, doing an extra little bit.

Hope you can finagle some sort of awesome refi or something soon, J$. You’re doing all the right things!

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34 J. Money January 21, 2013 at 5:10 pm

Thanks friend, we’ll figure it out eventually :) Things can always be worse!

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35 Joe @ Retire By 40 January 21, 2013 at 1:03 pm

We probably paid around $25,000 on 3 mortgages. I haven’t seen the statements yet. Tax is going to be rough this year. A lot of things to deal with.

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36 J. Money January 21, 2013 at 5:10 pm

3 places? wow – good for you! investment properties, yeah?

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37 Tony@YouOnlyDoThisOnce January 21, 2013 at 2:05 pm

Yikes! That’s about right, though…us homeowners pay a lot, and the deduction isn’t quite worth it….

Thanks for the post!

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38 Cassie January 21, 2013 at 2:23 pm

Last time I got a year end mortgage statement I paid just over $9300 in interest. I’m really curious to see how much I actually spent this past year (and now I’m going to go check my mail immediately after work…)

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39 Amy January 21, 2013 at 2:32 pm

Nothing paid in interest last year. Or the year before. We’ve been debt free (own our condo, own the car) since December of 2010. When I did have a mortgage ($32K), the interest was never enough to itemize! I am 48 this year and have never had a mortage I’ve been able to deduct the interest on. Of course, our condo is 900 sq. ft!

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40 J. Money January 21, 2013 at 5:11 pm

SWEET though!!! And you’re like a small % of those your age without a mortgage too, sadly enough. I hope I’m like you when I grow up :)

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41 Edward Antrobus January 21, 2013 at 3:22 pm

I haven’t gotten my statements yet. What bugs me about the place we are selling right now is that we rented the land it was on. Our monthly housing payments are about $750, but only about $100 of that is going towards principal!

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42 J. Money January 21, 2013 at 5:13 pm

yeah, that blows for sure…. it’ll get better over time though, yeah? Or are you selling and then buying somewhere else and starting the clock over again?

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43 Edward Antrobus January 21, 2013 at 10:26 pm

Actually, we are selling and going back to renting for a while until we can afford the house we really want, which doesn’t involve any associations.

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44 Snowball in Hawaii January 21, 2013 at 4:19 pm

I don’t have a mortgage, but I did pay $10,500 in student loan interest.

:’(

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45 J. Money January 21, 2013 at 5:12 pm

Ouch :( At least you’ve got some education out of it though for the future! It’ll be all made up for overtime :)

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46 Carla January 21, 2013 at 4:28 pm

What interest rate are you paying?! Market rate is around 3.25%! If you’re paying a lot more that than, barring bad credit or something, your REALLY need to refinance. On your full principle, starting this month at 3.25%, you’d only pay $160,000 in interest. You’re paying WAY too much…. You need to call a mortgage broker very soon.

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47 J. Money January 21, 2013 at 5:15 pm

I try every 3 months, believe me – so far no luck. We happened to buy at the peak 5 years ago and we’re way too underwater to refi, even with great credit and all.

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48 Carla January 22, 2013 at 10:13 am

Have you check out HARP 2.0? It’s for people who would qualify for a refinance, except they’re underwater. You can go up to 200% LTV with the right lender.
http://www.makinghomeaffordable.gov/pages/default.aspx

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49 J. Money January 22, 2013 at 12:23 pm

Yup, I ask about it every time just in case something has changed but I’m always un-qualified… I think ‘cuz my mortgage was never held by Freddie or Fannie back in the day, ugh… I lose on a technicality!

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50 Stephanie January 21, 2013 at 4:55 pm

Ours is actually not too bad!! We only paid $6800 in interest on the mortgage. I haven’t gotten statements from our student loans yet and at the moment I’m too lazy to look it up, but I’d guess those would be a total of around $1500-2000, give or take a little? Interest on the car loans is minimal – on each one we’re only paying a total of about $500 over the life of the loan, so those are negligible for this year.. Definitely less than $10k among all debts, and the only consumer debt we’re carrying at the moment is a 0% financing offer for my husband’s laptop, which we’ll be paying off early anyway. :-P

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51 J. Money January 21, 2013 at 5:16 pm

I love 0% offers!! It’s the best borrowing others’ money for free – ESP credit cards’ ;)

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52 The Happy Homeowner January 21, 2013 at 5:00 pm

I’ll be calculating this soon–I’m curious to see how much I saved with the big ReFi. Boo for interest!!

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53 Kate January 21, 2013 at 5:37 pm

Here’s what I paid in 2012:

Mortgage: $6,586 interest/$2,386 principal

Car: $123 interest/$2,777 principal (will be paid off in July 2013)

Student Loans: $196 interest/$10,640 principal (paid off!)

The student loan looks like it must be a typo, but it’s not. What a difference a year makes!

I’m thinking about refinancing to a 15 year mortgage to make that principal vs interest paid scenario a little less scary.

I love looking back at stuff like this at the end of the year to see what has transpired.

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54 J. Money January 22, 2013 at 12:24 pm

CONGRATS!!! $11k down in a year – way to go!!! And yeah you should TOTALLY look into a 15 year refinance as long as you can comfortable afford those new monthly payments (which may not even be bad all depending on your current situation). With all that extra money not going to student loans you now have more to put towards the other debts! Best feeling ever!!

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55 Kin @ Journey of Succes January 21, 2013 at 6:52 pm

Hey, I’m paying about the same amount of interest. It always helps me to think about the tax deduction we get using these interest payment so we get about 25-28% of it back, depending tax bracket.

$17000 x 75% = $12750

better? :)

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56 J. Money January 22, 2013 at 12:25 pm

Hey, yes! I do feel better about that actually, haha… Forgot about that sexy tax stuff! :)

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57 Jane Savers @ The Money Puzzle January 21, 2013 at 8:06 pm

Way back in the early 90s my first mortgage was at 11% for a six month term. Painful and there were just a few dollars to principle and thousands to interest.

Last year I paid a stupid amount of $480 in credit card interest. I no longer have credit card debt. I paid just under $600 in HELOC interest and I am in a huge rush to get the HELOC paid down before interest rates rise.

Does anyone know when interest rates might rise?

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58 J. Money January 22, 2013 at 12:27 pm

A six *month* term or a six *year* term? Paying off a house in 6 months is just insanely cool! :)

I don’t personally know when the interest rates will start going up, but I can’t imagine it being too far off… we’ve had YEARS of it being low so it’s just a matter of time in my opinion… Another reason to take advantage ASAP just in case it happens sooner than later!

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59 Janine @ My Pennies My Thoughts January 21, 2013 at 10:02 pm

Gah! This makes me not want to have a mortgage!

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60 J. Money January 22, 2013 at 12:27 pm

Start saving up a lot of cash and you won’t have to worry about it! Hehe…

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61 SMB January 22, 2013 at 8:51 am

We bought in July and paid $5,589 in interest this year and only $1,989 in principal. I’m still happy though because we’re paying around the same as we were to rent so that almost $2,000 is money saved for us.

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62 J. Money January 23, 2013 at 9:49 am

I like that mindset :)

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63 Brian January 22, 2013 at 3:13 pm

I paid a total of $379 in interest last year on my student loan and $0 on a mortgage. BOOYAH!

Of course the mortage interest will probably go up since we are probably going to get a HELOC to rennovate our only full bathroom this summer and possibly finish the basement and put a bathroom down there aswell.

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64 J. Money January 23, 2013 at 9:49 am

at least the HELOC interest is usually tax deductible :)

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65 debtgirl January 22, 2013 at 7:12 pm

This makes me feel very sick! I can relate!

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66 Mike @Personal Finance Beat January 23, 2013 at 11:20 am

Ha — wow, an eye-opening reminder on how much one truly pays to own a home! I will be in the market for a house over the next couple of years, and will remember this post when calculating my payments :)

As a renter with no student loan debt and someone who pays off my credit card in full every month, I’m not sure I paid any interest at all last year … but that will be sure to change in the next couple of years!

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67 Brooklyn Money January 23, 2013 at 1:00 pm

I got EXCITED when I saw how much interest I paid because it’s a great deduction that even the evil AMT (which I always pay) can’t take away!

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68 J. Money January 24, 2013 at 9:44 am

That is true – it’s nice to be able to deduct it, but even nicer to have $0.00 to deduct from! ;)

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69 Mrs. Frugalista January 27, 2013 at 9:48 am

I just received our statement and we paid $6,331.10 in interest. It consoles me to see that our beginning balance for 2012 was $211,611.40 and our ending balance for 2012 was $88,987.77. We paid $122,623.63! Our mortgage payment is $1770.79 and $1,500.00 of it is going towards the actual principal now. I’m so happy to have decided to kick a$s on the mortgage this past year.

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70 J. Money January 27, 2013 at 9:56 am

HOLY. $HIT. That is crazy good!!! Look at you guys go!!! :)

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71 Mortgage Mutilator @ Mutilate The Mortgage January 28, 2013 at 4:10 pm

We’re absolutely killing our “good debt” thanks to my research and tweaking and we will have it paid off in 6 years total (2 to go still). Also, we live in Australia… The “median house price” around here is a cool $500,000 or so and that’s the type of house we bought too. If you’re interested swing by the site one time, I guarantee you’ll learn a thing or two. We even have an incredibly sexy mortgage planning spreadsheet budget! ;-)

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72 J. Money January 28, 2013 at 9:59 pm

I bet you do! I’d love to take a sneak peek at it too, if you ever feel like sharing ;)

Congrats on all your success so far!!

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