Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
When you decide to finance your home with a simple interest mortgage, there are some advantages to this type of loan. The amount of money you will save by using a simple interest loan, instead of a conventional mortgage will depend on whether you can make your payments at a faster rate, on a consistent basis.
Unlike a conventional mortgage where the interest is calculated monthly, with a simple interest mortgage the interest is calculated on a daily basis. If you intend to pay your mortgage payment every 25 days like clockwork, you will save on the finance charges by using a simple interest mortgage.
If you have difficulty making a payment early, a simple interest loan does not have a grace period like a conventional mortgage allows. However, if you are able to pay extra in the following month to make up for the delay, you can catch up the interest and then resume paying early.
If you are unable to make your payments early, you may have to pay the exact number of payments that were required at the inception of the loan.
- What Lenders Don't Reveal About Home Equity Loans
- How to Get Approved for an FHA Loan despite Bad Credit
- FHA Eligibility with Bankruptcy and Foreclosure
- FHA Loans for a First-Time Home Buyer
- Should You Refinance? Make Sure the Timing is Right
- 3 Common Short Sale Mistakes
- Alternatives to Getting a 2nd Mortgage
- Short Selling a Rental Property
- What To Do When Mortgages Default