I Paid $558K in Interest on a $400K House: Here's the Math Nobody Shows You

When I bought my first home, the loan officer handed me a stack of papers and pointed to the monthly payment. Two thousand six hundred sixty-one dollars. That was the number I fixated on. Could I afford $2,661 per month? Yes. So I signed. What I did not do, and what almost nobody does, is multiply that number by 360. That is how many monthly payments are in a 30-year mortgage. When you do that math on a $400,000 loan at 7%, the total comes to $958,036. I borrowed $400,000 and paid back $958,000. The bank made $558,000 in interest on my house. That number should be printed in red on the first page of every mortgage application. It never is. How Amortization Actually Works Most people understand that mortgages charge interest. What they do not understand is how the interest is distributed across the life of the loan. This is where amortization schedules come in, and where the real damage hides. On a $400,000 loan at 7% for 30 years, your monthly payment is $2,661. That number stays the s