Search around the internet for current mortgage rates and play with some of the amortization calculators. You'll see that at the end of the payment schedule you will be paying almost an equal amount in interest as you do in principle. I want to know why financing entities advertise their loans with less than 6% interest/apr/rate, but end up charging you nearly 100% of the borrowed amount in interest by the end of the schedule. What gives? I thought that at the end of a loan for $100,000 at 6% interest meant you will only pay $106,000 total, not the $195,000 that the amortization calculators suggest.
APR stands for "annual percentage rate." This means when you see a loan with a 6% rate, it is 6% per year. On a $100,000 mortgage, where you aren't paying much of the principal down at first, a 6% rate would have you paying nearly $6,000 in interest in the first year alone.
Interest rates are always given annually, to make them comparable.
If you prefer to calculate the rate or the total interest for the complete time, like 10 years or 15 years or 30 years, it is simple math, and it tells you the total you will pay, but it is not helpful for picking the better or even the right offer for your situation.
Compare it to your car's gas mileage- what sense does it make to provide the information that a car will use 5000 gallons of gas over its lifetime? Is that better than a car that uses 6000 gallons (but may live 2 years longer?)